Search

ETC 51% ATTACK - a big loophole?


Is this attack for real or self-driven by the community of ETH?


1) Introduction to 51% attacks

Why should a 51% attack be done to a network? This is the big question for everyone in the hacking scene around Bitcoin and of course ETH and now ETC and also LTC.

There are two possibilities. First profit by reorganizing the chain structure which leads to different block times and faster payouts. For example, BCH has recently a lot of reorganizations of his blocks because of a misconfiguration in the default protocol which leads into slow block times, for example, and the digging into nothing problems of miners. As a profit owner, you know the most hash power has also the most profit because it could solve the riddle of a number more effective than the rest. This meansns you finally will find more blocks and get more rewards.

By reorganizing the blocks you will have also less time to wait for a confirmation and you can earn more money before the difficulty will be adjusted again. 2) You also get 51% minority of the node power. This is a very comfortable situation. You own the network. You got more earnings as described in 1) but you also can split the chain and create a new coin. You do not have to wait that nodes follow the consensus of a new chain or just deny. You just swap to the coin. Further, you have centralized the network and you are the only one who decides if upgrades coming. How they will take place and think about a network providing DeFi. You control the ruleset and you will be the king over the assets and lending scheme for example. You control the smart contracts and DApps and everything installed. No one can stop you. Finally in a short time before everyone is leaving you can earn a lot of money but with the nodes you can, for example, make new consensus and lead all transactions in your pocket by changing smart contracts, etc. Like the DAO has done. THE ETC 51% attack Unfortunately with over 17BTC (Around $170,000) hackers have been able to create a majority of miners. This shows the most problem of cryptocurrencies outside Bitcoin even Ethereum could become a victim of an attack, the lower ETH is in price. Because mining equipment is cheaper if the price of the token is lower. We see in this example that it is more centralized than decentralized. Bitcoin has more than 2,000,000,000 Miner and more than 720,000 nodes hidden behind VPN and IP encrypting systems. You can't do this with 17BTC ;) The history of ETC is reasonable for this attack!

ETC has a similar story like BTC and BCash. BCash and ETC haven't agreed to decisions of the main community (for different reasons) but this lead to a split and developers left to create a new coin. The problem in ETC was the DAO in Bitcoin SegWit vs. bigger Blocks (and of course the problems Roger Ver and Bitmain ran with Asic Boost and the Bitcoin unlimited coin)

Why the attack on ETC? Because people starting to leave ETH for ETC! Ethereum has the biggest loss of trust and proved code is not a law with the DAO hack and nowadays with the hack of smart contracts in DeFi systems. The main opponent problem is that Ethereum Classic users are not fine about Ethereums strategy to recover funds by "resetting" the system showing out that it is in a way centralized by the Ethereum foundation. This happens the first time with the DAO and meanwhile, ETH 2.0 will have this option by default. There is a lot of trouble over the direction where Ethereum will go and of cvourse another problem, the scalability problem.

The scalability problem

The launch of ETH 2.0 seems to be one of the hottest stories since the launch of the original Ethereum blockchain. Despite the first-ever smart contract platform being so hotly anticipated, it was not even three years old before its scalability issues started to become evident. Amid the blockchain and ICO mania of late 2017, the platform started to choke on the volume of its own traffic. 

So it’s hardly surprising that the long-awaited upgrade is proving to be such a talking point. Ethereum 2.0, also dubbed Serenity, has been several years in the making now, and the community has been forced to endure multiple delays. Vitalik Buterin himself has even stepped forward to assure eager fans that the implementation will go ahead regardless of the level of readiness. 

While it’s reassuring that Ethereum’s creator is taking the lead on shipping the upgrade, those who are watching the project closely still have legitimate reasons to feel concerned. 


The Proof Of Stake problem


The launch of ETH 2.0 seems to be one of the hottest stories since the launch of the original Ethereum blockchain. Despite the first-ever smart contract platform being so hotly anticipated, it was not even three years old before its scalability issues started to become evident. Amid the blockchain and ICO mania of late 2017, the platform started to choke on the volume of its own traffic. 

So it’s hardly surprising that the long-awaited upgrade is proving to be such a talking point. Ethereum 2.0, also dubbed Serenity, has been several years in the making now, and the community has been forced to endure multiple delays. Vitalik Buterin himself has even stepped forward to assure eager fans that the implementation will go ahead regardless of the level of readiness. 

While it’s reassuring that Ethereum’s creator is taking the lead on shipping the upgrade, those who are watching the project closely still have legitimate reasons to feel concerned.


The Ardor problem

Ethereum lost sharding and moreover Australia Government chose of competitor Ardor.

Because Ardor has been up and running since the start of 2018 and was designed with certain features in mind, the project even offers other benefits beyond what Ethereum 2.0 will offer once it launches in full.

For example, on Ardor, child chains can operate using their own native token, meaning they don’t have to require their users to hold ARDR. In contrast,  transaction fees on Ethereum 2.0 will still be paid in ETH, representing a significant barrier for users.

Furthermore, Ardor supports lightweight smart contracts that don’t require validation by every single node on the child chain. These contracts are stateless, meaning they’re less prone to bugs and hacks.

Combined, these features have made Ardor the blockchain of choice for several projects. Most notably, this year, the Austrian government has selected Ardor for inclusion in two projects. Hot City uses blockchain to crowdsource waste heat, redirecting it back into the energy grid. Quali sig is a project aimed at using blockchain-based digital signatures for secure communication in a crisis, prompted by the global COVID-19 pandemic. 

While the ETH 2.0 developers have finally committed to shipping the first phase this year, there is still no date. However, other projects that already offer many of the same features continue to gain traction. The risk for Ethereum is that by the time the 2.0 version does get fully implemented, further upgrades will already be required. 

Hackability of Etherum 2.0 "Nothing to stake" and "division by zero" problem has not been solved. Solidity as a smart contract language has more than 20 minor bugs unresolved. problems Ethereum itself has more than 600 coding bugs as McAffee reported in 2018 and these problems still exist. Community war The Ethereum Foundation finally made their decisions behind closed doors and this showed compared to Crypto Twitter a lot of community members felt betrayed by the promise Ethereum will be a community-driven system. It changed the support of decentralized communities voting in a government style to a leaderboard centralized version. The price of ETH

All the above problems and moreover since Hyperledger builds a bridge to Ethereum for a tokenless and cheap solution to run Etherum Private and Enterprise as an admin blockchain brought more attention to hyperledger which have won several projects like Walmart and Mercedes Benz. Gas is too expansive and setting up a non-token based Etherum chain keeps investors away.

ETC the enemy of Ethereum hardcore believers who loses money in DeFi and Future Contracts

The Community starts to leave Ethereum for Ethereum classic And this is finally the reason why ETC is under a 51% loophole attack. Exchanges stopped trading because every trading increases the block time. The tokens lost their value and about 1,700,000 Dollar has been taken away, still, the loophole digs more ETC and generates a loss. The hacker has one reason. Destroying ETC by 0 value means people haven't got an alternative and will come back to ETH. This will pump ETH and all hoping is that ETH can catch up with BTC again. This happens when people only for one reason got into the crypto world: Greediness! Finally, it's a war over the meaning of Ethereum.

If you want to read more follow here.

5 views

+491626428578

©2009 - 2020 by WNRP DWC-LLC - Satoshi Consulting & Education

  • Satoshi Consulting & Education