51% Attacks a “Universal Problem” For Proof of Work, says ETC Labs CEO

Repeated 51% attacks on the Ethereum Classic network are a source of “increasing frustration,” according to Terry Culver, CEO of Ethereum Classic Labs.

“Three attacks in one month will tell you that security is an issue on Ethereum Classic,” Culver told Decrypt media partner Forkast.News in a video interview. "Increasing frustration is definitely the best way to describe it.”

The threat of 51% attacks on proof of work blockchains is a “universal problem,” Culver said. “We believe and know that other blockchains get attacked more regularly, maybe with less visibility.”

How secure are proof of work blockchains?

Culver added that the threat of 51% attacks is a “shared problem” for everyone working in the proof of work blockchain world.

"It's a vulnerability that all Proof of Work blockchains have, even Bitcoin and Ethereum," Culver said. "We think that they're secure because of the cost to attack those networks, but the truth is that cost is subjective," he added, pointing out that, “The cost to attack one of those networks for a state actor, or even a non-state actor, is trivial—in fact, I think those attacks will come.”

The first 51% attack in August was made possible due to rented mining hashpower, allowing the hackers to “double spend” an estimated $5.6 million of ETC. Double spending involves overwriting entries in the blockchain ledger, either changing the destination of a transaction or reversing it. 

In the second attack, hackers netted about $1.7 million after employing the same method as the previous attack—renting hashpower from Nicehash provider daggerhashimoto, according to a Bitquery analysis. Prior to those attacks, Ethereum Classic was afflicted by a similar 51% attack in January 2019.

How ETC Labs is tackling 51% Attacks

Following the first two hacks in August, ETC Labs announced that they were working on a security plan for the Ethereum Classic network.

The plan includes a series of "defensive mining measures to both try to alert ourselves to impending attacks and deploy hashpower to prevent them," Culver explained. Ethereum Classic Labs is also working with exchanges to tell them to increase their confirmation times, he added.

ETC Labs has enlisted the help of New York-based international law firm Kobre & Kim to pursue the individuals responsible for the attacks. According to Benjamin J. A. Sauter, a partner at the law firm, the attacks did not occur due to any technical issue with Ethereum Classic, but were the result of a group acting maliciously to commit fraud.

"What we want to do is send a message to them: that you're not going to get away with this, we're not going to take it sitting down, and we are going to try to figure out who you are," Sauter told Forkast.News.

According to Culver, there’s no question of Ethereum Classic abandoning proof of work; instead, ETC Labs and other developers will continue to find ways to make the blockchain more secure. “It's a question of innovating so that we can prevent malicious activity and grow the kind of ecosystem we're trying to grow,” he said.

Forkast, a content platform focused on emerging technology at the intersection of business, economy, and politics, from Asia to the world.