Ethereum Classic's 51 Percent Attack Highlights the Challenges of Proof-of-Work Coins

Published on by Cryptoslate | Published on

On Jan. 5th, Ethereum Classic suffered a 51% attack losing a total of more than US$1 million spread over 15 different transactions.

The scale of this attack can offer some lessons to the challenges faced by blockchains secured by Proof of Work.

In 2018, there were a string of 51 percent attacks on Equihash based coins, Zencash, and Bitcoin Gold, as well as attacks that were from difficulty adjustment bugs on Monacoin and Verge.

Whatever the cause, the attack highlights the challenges facing PoW coins, especially for those that are not the dominant coin for a particular mining algorithm.

This means coins that are not dominant in their mining algorithm are more vulnerable to 51 percent attacks.

In the case of ASIC-backed coins, a single mining farm can be all it takes to attack smaller coins and is indeed a likely scenario if the mining collective supports the dominant coin.

Another benefit is that it makes a 51 percent attack less likely because both masternodes and miners would need to collude for this to take place.

Before a forked chain can be permanently cemented, an attacker would need to continue mining on the new chain after their attack has taken place, thus increasing the cost of implementing a continued attack.

Another ignored metric is the cost of a PoW attack in comparison to its market capitalization since larger coins have much more at stake.

The ETC attack shines a glaring spotlight on PoW's weaknesses which were previously thought to be a remote possibility or a problem for smaller coins only.

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