Ethereum classic suffered a 51% attack; developers deny, state a new ASIC card was tested

Yesterday there were discussions on Twitter about an Ethereum classic 51% attack which was a possible chain reorganization or double spend attack. However, Ethereum developers denied it and have shed some light on the incident. Ethereum classic is the original version of Ethereum which suffered a major hack in 2016. The developers then forked that and used it to create a new version where the hack was fixed. This new version was called Ethereum.

https://twitter.com/eth_classic/status/1082045223310483457

A 51% attack rate is when one or more parties have more than 50% of compute power (hash rate) in the network. Such a party could mine a large amount of block in the network, double spend coins and reward themselves unfairly. Double spending is exactly what it sounds like, paying the same amount twice. In a chain reorganization, single or more miners have significantly more hashrate than others in the network. Such a miner can define a new transaction history on the network.

Etherchain Tweeted that there was a successful 51% attack on Ethereum classic.

https://twitter.com/etherchain_org/status/1082329360948969472

Cryptocurrency coin exchange Coinbase published a post noting the same: “On 1/5/2019, Coinbase detected a deep chain reorganization of the Ethereum Classic blockchain that included a double spend. In order to protect customer funds, we immediately paused movements of these funds on the ETC blockchain. Subsequent to this event, we detected 8 additional reorganizations that included double spends, totaling 88,500 ETC (~$460,000)”.

Amidst the confusion, fear and lowering ETC value, the Ethereum team has responded to the incident. The latest update from Ethereum classic official sources contradict the Coinbase report. They said that this activity was a selfish mine and not a 51% attack. ‘No double spends were detected’. They said that an ASIC card manufacturer, Linzhi was testing their new ethash machines which had a power of 1,400/Mh.

The tweet seems to be removed but the contents stated:

Regarding the recent mining events. We may have an idea of where the hashrate came from.
ASIC manufacturer Linzhi confirmed testing of new 1,400/Mh ethash machines #projectLavaSnow
– Most likely selfish mining (Not 51% attack)
– Double spends not detected (Miner dumped blocks)

A more recent tweet from Ethereum Classic states that both angles of coinbase and ASIC card may be true.

https://twitter.com/eth_classic/status/1082392663314202624

Currently, ETC is 18th on the market cap with a market capitalization of ~$540 million.