Connect with us


Ethereum Classic’s Terrible, Horrible, No Good, Very Bad Week



Ethereum Classic developers were still licking fresh wounds late last week when yet another 51% attack was launched against their blockchain early Thursday morning. 

And as the bits settle, the proof-of-work blockchain’s future remains in question more than ever.

The first attack occurred on Aug. 1, the network’s second ever. Five days later, a second 51% attack followed the news that the first had indeed seen a successful double-spend of $5.6 million worth of ETC

Read more: Ethereum Classic Suffers Reorganization That Resembles 51% Attack Amid Miner Complications

The second attack was perhaps more important, although smaller in monetary terms ($1.68 million). By striking twice, the attacker proved the blockchain has seemingly no ability to protect itself from meaningful exploits.

A 51% attack on a blockchain refers to a miner or a group of miners trying to control more than 50% of a network’s mining power, computing power or hash rate.

Proof of work and immutability

Ethereum is a hard fork of Ethereum Classic. The two chains split in 2016 in a disagreement over the value of immutability following a compromised smart contract, The DAO, causing a blockchain “rollback.”

At that time, Ethereum Classic developers decided to eat the attack’s losses. The majority of Ethereum’s leadership and hashing power did not and hard forked under the ETH ticker.

Four years later, Ethereum Classic has continued to operate in the shadow of Vitalik Buterin’s Ethereum. The smaller chain’s last few hard forks have all but copy and pasted Ethereum’s work. 

Yet, the project has differentiated itself on one point: a commitment to the Proof-of-Work (PoW) consensus algorithm used by Bitcoin. Ethereum, on the other hand, has slowly moved toward the novel Proof-of-Stake (PoS) under the Ethereum 2.0 project.

Read more: Hard Fork Sets Stage for Ethereum Classic’s Second Major Departure From Ethereum

That technical decision is under heightened pressure. PoW coins with low hashing power are liable to being 51% attacked. And Ethereum Classic seems unable to do anything about it for the time being.

Exchanges and Grayscale

When the network will be secure remains unknown. So, Ethereum Classic developers have encouraged exchanges to increase transaction confirmation times. This protects against spreading the “double-spent” ETC. 

“We have taken down ETC since the attacks. We don’t plan to open it back up until the ETC network is deemed safe,” an undisclosed Binance security team member told CoinDesk in an email through spokesperson Jessica Jung.

Coinbase also increased the confirmation times for Ethereum Classic deposits to two weeks, the exchange said in Tweet.

Interestingly, ETC’s price was down only 5% on the week by Friday, according to Messari. One possible reason is crypto financial giant Grayscale’s stance on the matter. The firm holds 10% of all ETC supply via its regulated trust product.

“We’re continuing to monitor recent events and any steps the ETC network may take in response. But it’s important to note that events like this do not impact the security of the assets underlying our products,” Grayscale Investments Managing Director Michael Sonnenshein told CoinDesk in an email. Grayscale, like CoinDesk, is a unit of Digital Currency Group.

Read more: Grayscale to Fund Ethereum Classic Developers for 2 More Years

On the other hand, Messari research analyst Wilson Withiam told CoinDesk that ETC’s price – like many cryptossets – is broken from the asset’s fundamentals.

“ETC tends to follow the general market. Crypto enthusiasm is hot right now, so ETC’s price remaining afloat could be more related to current market sentiment,” Withiam said.

Next steps for Ethereum Classic

51% attacks are the reality low-cap cryptocurrencies live in, ETC Coop Executive Director Bob Summerwill told CoinDesk in an interview Aug. 3.

“If you are in a minority hash position, then you are in this position,” Summerwill said, referring to the first 51% attack.

Following the second attack, Summerwill told CoinDesk in a private message that “all hands are on deck” and that “both immediate, mid-term and long-term emergency actions are being considered.” 

One option is an emergency hard fork to a different hashing algorithm. The network currently uses the Ethash algorithm also used by Ethereum. Developers hope a technical tweak could throw off future attacks.

“Ethereum Classic is exploring alternative mining algorithms, specifically replacing Ethash with SHA-3, which could help mitigate any further attacks. But until that transition happens, Ethereum Classic will remain vulnerable,” Wilson said.

Legal counters

ETC Labs, the firm behind the Core-Geth client, is pursuing criminal charges against the attacker. To that end, ETC Labs has hired blockchain law firm Kobre & Kim and analytics business CipherTrace.

“We want to ensure that there are severe consequences for manipulating a public blockchain to steal. We are determined to protect the integrity of the ecosystem,” ETC Labs CEO Terry Culver said in a press release

Some have pointed out the oddity of a blockchain ecosystem turning to businesses with real-world addresses for security. Others, such as Geth team leader Peter Szilágyi, say it’s unlikely to lead to any security changes as the network simply needs more hashing power.

“Essentially, ETC’s security was broken down completely to zero,” Szilágyi said in the Ethereum core developers call Friday morning. “The actual damage is that you have an entity who can always mine whatever block and can always force itself on the network.”

Yet, Ethereum Classic developers remain determined.

“We are still steadfast in our resolve to do everything we can right now to ensure the ETC network and community are as secure as possible. Nothing has changed about that,” Culver said in an email to CoinDesk.


The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.



The United States Gets Its Crypto Back from Two Russian Hackers



The United States appears to be angry with crypto hackers as of late, and the country is making it clear that it’s not going to put up with bad actors anymore. The U.S. is presently accusing two Russian hackers of making off with roughly $17 million in assorted crypto units. The accusations come from the Justice, State and Treasury Departments.

The United States Will Not Put Up with Crypto Theft

The Treasury has identified two individuals allegedly involved in the scheme. They are Danil Potekhin, 25 years of age and living within the region of Voronezh; and Dmitirii Karasavidi of Moscow, who is presently 35 years of age. The two are accused of conducting cyberattacks a year apart from each other in 2017 and 2018 that ultimately deprived two U.S. crypto exchanges of more than $16 million.

The attacks on the exchanges sound rather complicated in that the pair created websites similar with those of the trading platforms they were targeting. These websites mimicked those of the original sources, and thus people who initially signed up or logged in on the copy sites gave the attackers their information, thereby giving the pair access to dozens of accounts and allowing them to make off with the funds.

Treasury Secretary Steven Mnuchin explained in a statement:

The individuals who administered this scheme defrauded American citizens, businesses and others by deceiving them and stealing virtual currency from their accounts… Ultimately, the stolen virtual currency was traced to Karasavidi’s account, and millions of dollars in virtual currency and U.S. dollars were seized in a forfeiture action by the United States Secret Service.

While it’s believed that the two initially tried to hide the stolen money by keeping it stored in several accounts on several different blockchains, the story is unique in that the U.S. officials in charge of the case appear to have gotten the money back. This is huge in that typically money stolen from a crypto platform or exchange is often lost for good. This is just more proof that the United States is not messing around.

This marks the second time in a while that the United States has managed to take effective action against nations that look to steal from American reserves. Recently, the country announced that it had garnered several million in crypto funds back from North Korea after the nuclear state stole a hefty digital sum as a means of building up its arsenal.

Trying to Prevent Future Crime

Right now, the two Russian men are facing a maximum 59 years in prison if they are convicted. At the time of writing, they are facing charges of conspiracy to commit computer fraud, among others. Secretary of State Mike Pompeo commented:

The United States will continue to promote accountability among malign actors seeking to undermine our economic security. Today’s coordinated action demonstrates our commitment to deterring cybercrimes.

Tags: , , Source:

Continue Reading


TikTok Avoids US Shutdown as Oracle, Walmart Swoop In

TikTok will live to see another day in the United States.  President Trump has approved a deal between TikTok owner ByteDance, Oracle and Walmart, which averts the ban that was to take effect on Sept. 20. The ban, which would have prevented all downloads of the app in U.S. app stores, has now been postponed […]

The post TikTok Avoids US Shutdown as Oracle, Walmart Swoop In appeared first on BeInCrypto.



TikTok will live to see another day in the United States.

President Trump has approved a deal between TikTok owner ByteDance, Oracle and Walmart, which averts the ban that was to take effect on Sept. 20. The ban, which would have prevented all downloads of the app in U.S. app stores, has now been postponed by one week.

In a statement, the  Commerce Department indicated that the restrictions are now slated to come into effect at 11.59 p.m. on Sept. 27. According to a CNN report, the deal maintains ByteDance as TikTok’s majority shareholder, with Oracle and Walmart cumulatively controlling 20 percent of the company.

Ownership and Data Access Issues

According to a Bloomberg report, ByteDance is seeking a $60 billion TikTok Global valuation, with the app’s U.S. operations alone valued at over $50 billion. This would mean that Walmart would pay $4.5 billion for its proposed 7.5 percent stake and Oracle would pay $7.5 billion for its prospective 12.5 percent stake.

The report further reveals that the deal’s final valuation and payment structures have not been agreed on yet because negotiations regarding equity structure and data security are still ongoing. Both Beijing and Washington are yet to fully agree on what parties get access to what part of TikTok’s valuable proprietary technology, such as recommendation algorithms.

According to Bloomberg, Chinese authorities are said to be in favor of the current deal because ByteDance maintains an overwhelming majority stake. This apparently was what gave Oracle the advantage over Microsoft, which offered to buy out TikTok Global in its entirety.

The deal would see Walmart CEO Doug McMillon take a seat on the five-member board of TikTok Global, which controls the app’s activities in the U.S. and around the world, excluding China. According to Bloomberg, VC firms Sequoia Capital and General Atlantic could also build equity positions in the company as part of the deal.

In a statement from TikTok quoted by CNN, the company said:

“We will also maintain and expand TikTok Global’s headquarters in the US, while bringing 25,000 jobs across the country.”

TikTok BanTikTok Ban

TikTok To Migrate From AWS to Oracle Cloud

The deal will also see TikTok move from Amazon Web Services (AWS), its current hosting provider, to Oracle Cloud. In a statement quoted by CNN, Oracle CEO Safra Catz said:

“As a part of this agreement, TikTok will run on the Oracle Cloud and Oracle will become a minority investor in TikTok Global. Oracle will quickly deploy, rapidly scale, and operate TikTok systems in the Oracle Cloud. We are a hundred percent confident in our ability to deliver a highly secure environment to TikTok and ensure data privacy to TikTok’s American users, and users throughout the world. This greatly improved security and guaranteed privacy will enable the continued rapid growth of the TikTok user community to benefit all stakeholders.”

According to CNN sources, Oracle will get full access to TikTok’s source code and app updates in order to ensure that there are no back doors for the Chinese state to harvest data or spy on the app’s 100 million+ American users.


Continue Reading


Is Bitcoin really on Ethereum ? Will either proponents softfork BTC to ETH?



Bitcoin and Ethereum have long been the two most-popular cryptocurrencies in the market. While Bitcoin has remained top of the charts, for most of the time, Ethereum has been the cryptocurrency following it. This, despite the fact that a number of altcoins have taken a jab at ETH’s position over the years. Spoiler – None have survived for long.

Due to ETH’s persistence, the community is also massive. Hence, it is obvious that communities would compare each others’ coins, network effects, etc. It is no surprise then that the debate/fight between BTC and ETH is also a longstanding one.

In today’s debate, the topic of contention is simple, mundane, yet unclear – whether Bitcoin is on Ethereum or not. Although the debate in question had seemingly diverted away from the topic at press time, the same was reignited by Peter McCormack’s latest tweet.

Now, McCormack has long claimed to have a mind open enough to understand and learn about other altcoins, despite being a Bitcoin proponent himself. While many have attacked him for his tweet, it does make sense because, obviously, Bitcoin is not on Ethereum. Neither of them exists on each other’s, but on their own, separate blockchains.

Before we get into the debate, it should be known that Bitcoin, as an ERC token, ergo on the ETH blockchain, has been on the rise lately. For argument’s sake, the total number of Bitcoin on Ethereum, as of press time, was worth $1 billion aka 106k BTC.

Although the total BTC locked on ETH has exceeded 100k, there are different tokens like WBTC, rBTC, hBTC, tBTC, etc. and each token varies in build and construction. The common argument that can be made here is that none of the Bitcoins are really on ETH because, in fact, they are just IoUs.

Bitcoin developer Luke DashJr, however, was one of the many to disagree, after he tweeted,

“I don’t agree. Bitcoins can be on Ethereum in the same way they’re on exchanges, Liquid. etc”

Ethereum folks were quick to pitch in to, with many happy about Bitcoin finally finding its way to the Ethereum blockchain.

Interestingly, while a majority of the Bitcoin and Ethereum communities were arguing about what is right and what is the right terminology, Vitalik Buterin, Founder of Ethereum, came forward to discuss a far-fetched idea. An idea where miners could, in the near future, soft fork Bitcoin and “reject withdrawals from Bitcoin-side addresses that do not have valid corresponding initiation orders on the Ethereum side.”

Needless to say, this was the latest cannon fire in the ongoing battle between Bitcoin and Ethereum.


Continue Reading