Ethereum Classic

Ethereum Classic Hit by 51% Attack Said To Be Worth Around $460,000

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ETC is said to have been hacked from around 6th January, Bitfly confirmed the attack, they are the operator of the Ethereum block explorer, the Ethernodes node explorers, and an Ethereum Classic mining pool. Biyfly commented on Twitter:

Bitfly Tweet 7th January 2019

What does this all mean?

When a hacker or group of hackers are able to attack 51%, they are able to reorganise the blockchain or maybe even replace it. In addition to this, they are also able to introduce malicious behaviour that means that hackers can ‘double spend’. This means they are able to make multiple fraudulent transactions on the same coin.

Coinness reported the unconfirmed story first on the 6th Jan but no statement had been made by Bitfly until late last night. The website wrote that transaction rollbacks had triggered an alert for Chinese blockchain security firm SlowMist.

Originally, the ETC team commented on the report and said there were no reports of a hack and the network was working with no problems but some 8 hours later after some investigation they put out another tweet saying “all exchanges and mining pools” to “please allow a significantly higher confirmation time on withdrawals and deposits (+400).”

A full day before this, some controversy came in when the massive exchange Coinbase came forward and stated that it noticed a “deep chain reorganization of the Ethereum Classic blockchain that included a double spend” on Saturday, January 5th, a full day before the CoinNess report and nothing had been done. It was said by Etherum Classic “unfortunately [Coinbase] did not connect with ETC personnel regarding the attack.”.

This is not the first time something like this has happened, it is said that each day $2.7 million is stolen from exchanges. In a year where $1bln was stolen, by far the biggest was the Coincheck hack in January. A massive $532.6 Million was taken of XEM coins from the hot wallet of Tokyo-based crypto exchange Coincheck. It is clear there are still hurdles for cryptocurrency assets to overcome but in the world of fiat currencies alot more money is stolen on a daily basis and fraudulent transactions are still part of the mainstream financial system.

Looking at the 4 hour ETC/USD chart, many analysts expected the price to be lower considering the circumstances. Price is holding the 4.88 support and has retraced above 5.00 again in the last 2 hours. There are now some key support areas to keep an eye on, 5.00 seems to be a nice psychological support level but if that fails between 4.50-37 looks sticky. Since 6th Jan we have fallen some 10% but look out for more guidance from Ethereum as if they manage to get things sorted we could get a relief rally back toward the highs of 5.71.

ETC/USD 4 Hour chart from Tradingview.com

(ETC/USD 4 Hour chart from Tradingview.com)

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