The Growing Concern: 51% Attacks on Ethereum Classic
Ethereum Classic has been facing an onslaught of 51% attacks, and it’s starting to look like a scene from a hacker movie – except it’s happening in real life and is really making investors sweat. ETC Labs has raised the alarm, suggesting that it’s undoubtedly time to impose regulations on hashpower rental marketplaces. The shocking twist? At least two of these breaches were executed through rentals from a platform some of us might use to rent a power drill.
How Hashpower Rentals are Fueling Attacks
The maliciousness of these attacks was confirmed by both ETC Labs and NiceHash, a service popular for renting out computing power. According to ETC Labs’ CEO, Terry Culver, research from CipherTrace reveals that the attackers financed their nefarious activities using the funds garnered from an earlier attack—talk about recycling crime! The fallout from the second mischief was major, costing the OKEx exchange a whopping $5.6 million that they had to cough up for user reimbursements. Ouch!
A Look at NiceHash: The Unregulated Marketplace
Speaking of NiceHash, we cornered the company’s chief marketing officer, Andrej Skraba, for a roundtable on the pressing issues surrounding hash rental businesses. It turns out while NiceHash is regulated as a crypto exchange (doing their KYC and AML homework), their hash rental service isn’t under the same scrutiny. No ID at the door, folks! The lack of regulations means users renting hashpower can operate anonymously.
What that Means for Blockchain Security
In Skraba’s words, they’re like Internet Service Providers, just delivering packets of data to mining pools, and if you want a truly decentralized ecosystem, imposing restrictions looks like tying a parachute to a gazelle. While he conceded better KYC and AML processes could mitigate some risks, he aptly noted it’s a bit like putting a Band-Aid on a bullet wound: it might help, but it won’t solve the underlying problem.
Current State and Defensive Measures
As it stands, Ethereum Classic’s hashrate is recorded at 1.4 Th/s, while NiceHash boasts nearly 10 Th/s available. That’s like bringing a toothpick to a knife fight! To counter these attacks, ETC Labs plans to employ defensive mining strategies—essentially renting hashpower to beef up their defenses.
The Concept of Defensive Mining Explained
The goal is simple yet ingenious: raise the network’s hashrate to deter attackers by making subsequent incursions unbearable in terms of costs. Picture it as fortifying your home before the bad guys come knocking—you wouldn’t just leave the door wide open. But keep in mind, while regulation may reduce potential threats, establishing a coherent framework across jurisdictions will be like herding cats.
The Bigger Picture: Community Solutions
Among the solutions floated by the ETC community are checkpointing systems to stop attacks in real-time, swapping hashing algorithms, or creating a decentralized treasury to enhance security. Interestingly, some suggest that the latest breach might have been the result of ETH miners taking advantage of the shared DaggerHashimoto algorithm. Until such strategies are ironed out, the potential risk remains. Let’s hope that tomorrow’s developers’ call on checkpoint systems will yield fruitful discussions!
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