Ethereum Classic (ETC) is feared to have suffered a 51 percent attack. As it has appeared, transactions on the platform have been rolled back causing major cryptocurrency exchanges like Coinbase to halt trading.
In layman terms, double-spend attacks are when a malicious actor gains the majority computational power inside a blockchain, which they then use to enforce unauthorized transactions over legitimate ones.
The official twitter handle of Ethereum Classic noted that the Ethereum Classic platform may have been compromised although the account noted that the platform is working as required.
Hours later, the account released a fresh tween warning virtual currency exchange to be on the lookout when handling Ethereum Classic transactions.
Quartz noted that, a single ETC miner “temporarily had more than 60% of the network’s hash rate.”
The platform said it delisted ETC trading on its platform after the third attack, during which a first double-spend transaction that moved funds illegally was observed.
Another eight followed suit after that, and, in total, attackers managed to carry out double-spend transactions of nearly 88,500 ETC (~$460,000) over the last three days.
With such a huge hash rate controlled by a single entity, the entity had gained complete control.
The situation over which transactions get processed on the blockchain network, allowing them to mine a disproportionate large amount of the network’s blocks, double-spend coins by altering the blockchain, and generally reward themselves unjustly.
Although the miner’s hash rate has since dropped, the miner has been controlling approximately 45 percent of Ethereum Classic’s hashrate for the past twenty-four hours.
Most of the blocks added on the Ethereum Classic blockchain by the miner were empty. However, the malicious miner was able to transfer Ethereum Classic coins valued at around $500K.
Coinbase said it halted interactions with the Ethereum Classic blockchain when they:
“Observed repeated deep reorganizations of the Ethereum Classic blockchain, most of which contained double spends. The total value of the double spend that we have observed thus far is 88,500 ETC (approx $460,000)”.
The ETC developers argued that a 51 percent attack cannot be defined by a harsh power consolidation thus ruling out the double spend claims.