This article has been updated since publication to reflect Coincheck and bitFlyer’s decision to temporarily pause Ethereum Classic deposits and withdrawals.
Ethereum Classic (ETC) developers have stated that a mining pool evidently claiming over 50 percent of the network’s hashrate was “most likely selfish mining” in a tweet today, Jan. 7.
ETC devs also explicitly stated in the same tweet that the previously noted hashrate consolidation is not a 51 percent attack, and that double spends were not detected.
The tweet revealed a potential cause for “the recent mining events,” attributing the increased hashrate to the testing of new 1,400/Mh ethash machines by application-specific integrated circuit (ASIC) manufacturer Linzhi.
Also today, major American cryptocurrency exchange Coinbase published a blog post revealing it had “detected a deep chain reorganization of the Ethereum Classic blockchain that included a double spend” on Jan. 5. The exchange proceeded to halt withdrawals and deposits of ETC, which have evidently not resumed by press time.
Coinbase also notes in the post that following the incident, it detected eight additional reorganization episodes that also included double spends, amounting to a reported 88,500 ETC (about $445,155 at press time).
Coinbase also specified that it was “not the target of this double spend and no funds were lost.”
On Jan. 7, cryptocurrency exchanges Coincheck and bitFlyer tweeted that they would be temporarily halting deposits and withdrawals of Ethereum Classic. Today, Jan. 8, at press time, both exchanges noted on Twitter that the temporary pause is still in effect.
Chain reorganization is a situation when a single miner, or pool, has more resources than the rest of the network. The dominant miner can then define a new transaction history on the network by “pick[ing] an arbitrary previous block from which to extend an alternative block history.”
In November, Coinbase’s wallet service launched support for ETC, allowing users to view, send and receive ETC. Coinbase first announced it would add support for ETC in June, leading to a sharp temporary spike in the asset’s value.
In May, Brazilian researcher Husam Abboud of FECAP University in São Paulo calculated that it could take “between 55 to 85 million [USD] (averaged $70 million)” to conduct a 51 percent attack on the Ethereum Classic network.
At press time, ETC is ranked 18th by market cap on CoinMarketCap, trading at around $5.02, down over 7 percent on the day. The coin’s market capitalization is around $539 million, while its daily trading volume is around $139 million to press time.