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ETC Labs Proposes Inclusion Of Law Enforcement To Prevent 51% Attacks

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The crypto-verse is not new to hacks and attacks, however, the Ethereum Classic network endured an array of 51% attacks over the last month. The most recent attack took place just two days ago which initiated the reorganization of over 7,000 blocks on the network or about two days’ worth of mining. In the light of the last three attacks, the Ethereum Classic Labs have decided to step up by launching a new strategy that includes law enforcement and regulators from all across the globe.

Law Enforcement To Protect The Ethereum Classic Network

While Ethereum Classic Labs aka ETC Labs has an investigation underway to probe the roots of the latest attack, the previous attacks have led to the initiation of the platform’s decision to bring in the big guns. Back on 30 July and 1 August 2020, the Ethereum Classic network underwent a 51 percent attack following the purchase of hash rates from Nice Hash. Previously this company had been swimming in troubled waters after losing around $62 million in Bitcoin. To steer away from potential attacks via hash rental platforms, ETC Labs intends to seek accountability as well as transparency to hash rental by engaging law enforcement.

ETC Labs wrote a Medium post about the same and pointed out that several crypto platforms are subject to scrutiny from lawmakers all over the world. Anti-money laundering [AML] and KYC have been made mandatory for every crypto platform. Citing NiceHash as a precedent, ETC Labs noted that hash rental platforms often resort to illegal activities. The post further read,

“With little or no KYC, AML, or crypto address screening, customers have the ability to rent hash rate to potentially launder cryptocurrency for freshly minted tokens with no history. Considering how important hash rate is to the security of Proof-of-Work blockchains, this is a serious vulnerability for the blockchain ecosystem as a whole.”

Additionally, ETC Labs affirmed that it had already commenced working with regulators and officials in “relevant jurisdictions”.

While many lauded ETC Labs for its latest move, a few others outrightly condemned the initiative. Bitrefill’s John Carvalho tweeted in response to the ETC Labs’ latest initiative. The tweet read,

Back in mid-August, following the second 51% attack on the network, ETC Labs had proposed an “ETC Network Security Plan“. This elaborate plan consisted of both immediate as well as long term measures to tackle potential attacks. Change in the mining algorithm was one of the primary focuses of the plan. The platform intends to transition the network’s mining algorithm from Ethash aka Dagger Hashimoto Proof-of-Work to either Ethereum’s Keccak256 or RandomX.

Ethereum Classic Suffers Yet Another 51% Attack; 7,000 Blocks Reorganized

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Ethereum Classic [ETC] has suffered a 51% attack for the third time in a month following which reorganization of over 7000 blocks occurred on the network which corresponded to approximately two days of mining.

A chain reorganization takes place when a party gains more hashing power than the rest of the miners in the network. The offending miner then achieves the ability to rewrite the chain’s history and also “double-spend” the blockchain’s native token. The double spends made in the latest attack is not known yet.

A leading organization behind the Ethereum Classic network, ETC Labs called the entire fiasco “suspicious” as it occurred a day after the core-dev meeting.

The 51% attack was first spotted by the mining pool Ethermine’s parent entity Bitfly which revealed that all the lost blocks will be removed from the immature balance and that the platform will check all payouts for dropped transactions.

Ethereum Classic official Twitter handle also responded and tweeted,

“While ETC is still making progress in evaluating proposed solutions, we are aware of the current risk to the network at these low hash rate levels. To miners, exchanges, and other service providers we suggest keeping confirmation requirements levels well above 7K for now.”

Following the attack, Ethereum Classic’s hash rate which was declined significantly over the past couple of months was down by 4.77% in the last 24 hours. At 3.78 Th/s, the hash rate was still hovering close to its three-year low.

ETC Cooperative, which happens to be another prominent foundation supporting ETC network’s development also addressed the recent turn of events and tweeted,

“We are aware of today’s attack and are working with others to test and evaluate proposed solutions as quickly as possible. As ETC makes progress in areas, it still makes up just ~3% of ETH’s hash rate. We kindly ask that miners, exchanges, and others raise confirmations to >12K.”

The network suffered its first 51% attack of the year between July 29 and August 1, when 3,693 blocks were reorganized. Less than a week later 4,000 blocks were reorganized after the network was hit by the second attack. During this time, the adversary was able to double-spend 807,260 ETC [nearly $5.6 million, at that time] after spending 17.5 BTC [around $200,000] to acquire the hash power for the attack.

In light of these events, cryptocurrency exchange, OKEx had revealed that it was considering the removal of the asset.

The series of attacks pertaining to the network insecurity has pushed ETC’s price further down the bearish region as it was down by nearly 50% since February this year. Notably, ETC had suffered a similar attack in 2019.