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Crypto Investors Have Ignored Three Straight 51% Attacks on ETC

Three 51% attacks on the Ethereum Classic network have not yet made a significant impact on the price of its cryptocurrency.

Republished by Plato

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Despite three “51% attacks” in a month, Ethereum Classic’s price has demonstrated strong resilience. Though down a bit for the past month, its persistence may indicate that security is not a top priority for investors rushing to join a bull run in the crypto market.

However, some warn that unless it improves its blockchain and makes it safer, additional attacks on Ethereum Classic could trigger a market sell-off and lead to a collapse of its digital asset.

For a blockchain network’s security, a “51% attack” is pretty much as bad as it gets. That’s when a single entity gains control of a majority of the network’s computing power, allowing it to siphon off extra units of the currency in what’s known as a double-spend. 

So it would stand to reason that three successful 51% attacks in a month against the Ethereum Classic blockchain might dent investors’ confidence. But prices for the project’s native ETC token haven’t really taken a hit – a sign traders could be less concerned about security vulnerabilities than a quick profit in fast-moving cryptocurrency markets.

At press time, ethereum classic is trading at $5.06, down about 27% in the past 30 days at the same time bitcoin is off by 15%. 

Three 51% attacks in a month

For the Ethereum Classic blockchain, 51% attacks have been a threat for a long time. Unlike Ethereum, from which it was hard forked, the Ethereum Classic network is committed to the Proof-of-Work (PoW) consensus algorithm, which is also used by BItcoin. But for large networks like Bitcoin, a 51% attack is prohibitively expensive to do given the enormous amount of computational power required by PoW to successfully do it. Ethereum Classic’s hashrate is much smaller, making it far more vulnerable to 51% attacks.

By press time, the hashrate of Ethereum Classic stood at 1.668 terahash per second, while Bitcoin’s at 117.95 exashes per second, according to BitInfoCharts.

Ethereum Classic is the product of a hard fork after the Ethereum network split in different ways following an infamous hack in 2016. The PoW-based blockchain has been chasing after Ethereum, which now represents the No.2 cryptocurrency by market capitalization.

Ethereum is planning on changing its algorithm sometime next year. In a tweet thread Sept. 2, Ethereum founder Vitalik Buterin argued Ethereum’s planned Proof-of-Stake (PoS) algorithm gives it a “key fundamental” advantage over PoW.

screen-shot-2020-09-03-at-12-55-45

“In PoW, on the other hand, a successful attacker can just attack over and over again, with no possible way to delete their hardware without deleting everyone else’s hardware.”

During the month of August, the Ethereum Classic network suffered not one but three 51% attacks: the first one took place on Aug. 1,the second on Aug. 6 and a third on Aug. 29.

NiceHash, a hashpower broker, acknowledged its platform may have facilitated the recent 51% attacks, in a blog post on Sept. 1, but it also concluded that such attacks cannot be prevented or mitigated in a “truly decentralized proof-of-work solution.”

“The only thing one can do is make the price of an attack higher than the attacker reward,” the post added.

The Ethereum Classic network also suffered a 51% attack in early 2019, which led crypto exchange Coinbase to halt all ETC transactions, withdrawals and deposits at the time.

James Wo, founder of ETC Labs, the leading organization supporting the Ethereum Classic network, told CoinDesk via a spokesperson that his team has been trying to enhance the network’s security in the past year, including expanding the network’s core development team, and partnering with companies such as Chainlink, Swarm and Bloq.

The company announced two new hires on Sept. 3 to ETC’s core development team.

“These developments and partnerships are working to quickly propel the advancement of ETC and ensure a bright future for the network,” Wo said, who added that ETC’s price has held “strong” even with the recent 51% attacks.

Indeed, the attacks have not had any significant impact on its prices, which prompted a question: why would anyone put money in a token when its security is not guaranteed?

An unattractive gift

A large percentage of ETC holders received their tokens involuntarily after the Ethereum chain split and, as a result, the price of ETC has remained stable over the past few years simply because many ETC holders have ignored taking any actions.

etc-addressses-and-balances
Ethereum Classic Addresses Balance Analysis. Just 610 addresses (0.03% of total) control 86% of all ethereum classic. Reference rate: 1 ETC = $5.10
Source: IntoTheBlock

“Many people are just sort of sitting on it and maybe not necessarily thinking about trading [ETC] or not necessarily actively monitoring their transition,” Meltem Demirors, the chief strategy officer at CoinShares, said in a phone interview with CoinDesk. “Because a lot of people who hold assets from a fork don’t really have any incentive to sell them unless the value goes up dramatically.”

Citing the fact that a large number of Ethereum Classic wallets have been inactive, Demirors said some ETC holders may not see the value of selling or even claiming their ETC.

screen-shot-2020-09-04-at-11-38-02-am
According to data from Coinmetrics, active addresses for ETC are at all time low, 1% of the level they were just six months ago.
Source: CoinMetrics

“I don’t know how motivated they are to actually try to sell or try to move their assets to a wallet or on an exchange,” she said. “A lot of people just don’t think it’s worth the effort and energy.”

Similar to DeFi

Ethereum Classic’s price resilience during these attacks tells the story that the majority of crypto investors right now are more focused on “short-term” price momentum trades than “long-term” chain security and fundamentals, according to John Todaro, director of institutional research at the cryptocurrency analysis firm TradeBlock.

“Price momentum in the space has accelerated recently and security concerns are being pushed aside to an extent,” he told CoinDesk via email. “While Ethereum Classic has legitimate long-term concerns given the recent 51% reorg attacks, we have not seen heightened capital outflows from ETC.”

That is in line with the red hot decentralized finance (DeFi) world where capital continues to be allocated despite warnings of high risks with certain yield farming smart contracts. 

“You see people putting billions of dollars of their digital assets into unaudited smart contracts, right now I’m not sure people are really so concerned about security,” Demirors said.

And as long as the market remains in bull mode, it is likely that traders will compromise their security concerns for higher returns – until that security problem becomes big enough to trigger a collapse of the entire system.

In the DeFi world, that problem could be a few smart contract bugs. In Ethereum Classic, it could be a large-scale dump of the token as a result of any additional 51% attacks, Todaro warned.

That is not entirely impossible: After the first two attacks in August, crypto exchanges contemplated or else took drastic measures which would make ETC less accessible and attractive to investors. OKEx said that it will consider delisting the asset, and Coinbase extended deposit and withdrawal confirmation times for ETC to around two weeks.

“I think the big mover will be exchanges delisting Ethereum Classic and there are no longer any venues where you can trade it easily,” Demirors said. “I think then you may see people say ‘ok, maybe I should take my Ethereum Classic and liquidate it before it becomes impossible to do so.’”

Grayscale’s role

While some have attributed crypto financial giant Grayscale’s position on ETC to its relatively stable pricing, the company refused to admit its influence on ETC’s trading.

“It would be very difficult for us to comment or point to our operating a vehicle around a particular protocol as being influential to the prices,” Michael Sonneshein, managing director of Grayscale, said in a phone interview with CoinDesk, pointing out his company also has large positions in bitcoin and ether. Grayscale, like CoinDesk, is a unit of Digital Currency Group.

But according to Demirors, there are only a “small” number of financial investment firms – Grayscale included – involved in this digital asset, making it natural that Grayscale is in the spotlight when it comes to Ethereum Classic.

“[Grayscale] holds a sizable percentage of the circulating supply in Ethereum Classic, which is locked up in the trust that will never be liquidated,” she said. “So I think some of those natural factors, which can drain the supply of Ethereum Classic on the market, have a dampening impact on the price.”

As of July 31, 2020, Grayscale’s Ethereum Classic trust had $86.4 million of assets under management. That was equal to about 10% of Ethereum Classic’s market cap of  $861.7 million on that date. As of press time, total market cap was down to $619.8 million.

The recent 51% attacks on the Ethereum Classic network also have not led to any additional questions or worries from Grayscale’s clients on this crypto asset, according to Grayscale’s Sonneshein. Grayscale started its ETC Trust in April 2017.

Disclosure

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.

Source: https://www.coindesk.com/crypto-51-attacks-etc

Blockchain

GBA Healthcare Working Group Releases White Paper as First Asset inBlockchain Ethical Design Framework for Healthcare

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WASHINGTON, DC –March 2021

Beginning early 2020, theGovernment Blockchain Association (GBA) Healthcare Working Group (HWG)began undertaking the development of an ethical design framework for blockchain solutions in the healthcare industry as a service to the public. The GBA HWG is releasing the first asset in the Blockchain Ethical Design (BED) Framework for Healthcare in the form of a White Paper.

We are excited to offer this guidance to healthcare policymakers, decision-makers and innovators in implementing blockchain featured technology in the healthcare space. The BED Framework for Healthcareis being developed collaboratively by members in the HWG including caregivers, entrepreneurs, healthcare technologists and legal professionals from around the world. We cover a comprehensive spectrum of use cases, regulatory and legal scenarios, and procedural insights based on real world experience in healthcare technology innovation. This White Paper is only the first asset in a suite of guiding tools the GBA HWG will be releasing through 2021, and we are looking forward to the feedback of our audience.” –Marquis Allen, GBA Healthcare Working Group Chair

The purpose of this publication is to:

  • Identify potential ethical issues of blockchain used in health service delivery
  • Discuss potential ethical issues for stakeholders across the healthcare ecosystem including regulatory and compliance segments
  • Propose a conceptual framework of blockchain ethics as it applies specifically to its design, implementation and use in healthcare.
  • Create an outlinefrom which the Blockchain Ethical Design (BED) Framework for Healthcare and its assets, tools, documents and content will be developed by the GBA HWG.
  • Raise awareness and stimulate further debate on the ethics of blockchain in the healthcare IT,health system governance and regulatory communities.

The GBA invites you to contact them for more information.

Learn more about the GBA: gbaglobal.org

For more information about the GBA Healthcare Working Group: gbaglobal.org/HWG

To download the whitepaper: gbaglobal.org/download

Contact: Kathy Dache @ Kathy.Dache@gbaglobal.org

________________________________________________________________________

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Blockchain

Big Data Protocol Staking Surges Over $6 Billion in Latest DeFi Frenzy

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Boasting three and four-digit annual percentage yields, Big Data Protocol (BDP) has become the latest DeFi frenzy as total liquidity on the protocol has skyrocketed to $6.1 billion just two days after liquidity mining incentives were launched.

The protocol announced its fair launch on March 6 where 100% of the initial circulating supply, which is 30% of the total of its BDP token, will be distributed to the community over six days. It is backed by a team of technologists, crypto investors, and data scientists and designed to incentivize liquidity mining over the long term.

There are liquidity pools for twelve different DeFi assets and they have attracted a lot of collateral in just two days.

Big Returns for DeFi Stakers

Over a million ETH has been deposited in the wrapped Ethereum pool according to the BDP data vault, earning an APY of 40%. Almost 17,000 BTC is currently in the wBTC pool earning 82% APY while the Tether vault has gained 728 million USDT earning 96%.

The top earning pools are boasting four digit returns with OCEAN at 1,375% and TOMOE at 1,315% at the time of writing.

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A blog post explaining the tokenomics elaborated:

“Users provide liquidity to earn bALPHA over the course of 3 months. Subsequent data tokens, named bBETA and bGAMMA, will launch after bALPHA, which will further incentivize liquidity.”

A portion of BDP and data tokens are burnt as the usage of the Protocol and marketplace grows over time, it added.

The total supply of 80 million tokens will be divided as follows: 30% distributed in the initial six day yield farming incentive, 35% allocated to future staking rewards, 25% held as an ecosystem reserve, and 10% to the team and advisors.

The bALPHA data token will have a total supply of just 18,000 tokens which will all be allocated to liquidity mining rewards. Two more data token sets, bBETA and bGAMMA, will be announced in due course the blog post added.

BDP Price Update

At the time of writing, BDP was trading at $5.85, falling 19% on the day after hitting a peak of just over $14 on Sunday, March 7.

The bALPHA price is a little over $10,000 per token after skyrocketing to over $40,000 at the weekend according to Coingecko.

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Source: https://cryptopotato.com/big-data-protocol-staking-surges-over-6-billion-in-latest-defi-frenzy/

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Blockchain

TA: Bitcoin Turns Attractive Above $50K, Why BTC Extend Its Rally

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Bitcoin price gained bullish momentum above the $50,000 resistance against the US Dollar. BTC traded towards $52,000 and it remains supported for more upsides.

  • Bitcoin started a fresh increase above the $50,000 and $50,500 resistance levels.
  • The price is now trading well above $50,000 and the 100 hourly simple moving average.
  • There is a key rising channel forming with support at $50,500 on the hourly chart of the BTC/USD pair (data feed from Kraken).
  • The pair could correct a few points, but the bulls are likely to protect $50,000 and $49,500.

Bitcoin Price Starts Fresh Increase

After a strong close above the $48,000 level, bitcoin started a fresh increase. BTC was able to clear the key $50,000 and $50,500 resistance levels to move into a positive zone.

There was also a break above a major bearish trend line with resistance near $48,400 on the hourly chart of the BTC/USD pair. The pair extended its rise above the $51,000 level and traded to a new weekly high at $51,853.

It is now correcting lower, but it is trading well above $50,000 and the 100 hourly simple moving average. An initial support is near the $50,750 level. It is close to the 23.6% Fib retracement level of the upward wave from the $47,141 swing low to $51,853 high.

Bitcoin Price

Source: BTCUSD on TradingView.com

There is also a key rising channel forming with support at $50,500 on the same chart. The next major support is near the $50,000 level. Any more losses may possibly lead the price towards the 50% Fib retracement level of the upward wave from the $47,141 swing low to $51,853 high near $49,500. The main support is now forming near the $48,800 level and the 100 hourly simple moving average.

More Upsides in BTC?

If bitcoin stays above $50,500 and $49,500, it could start a fresh increase. An initial resistance on the upside is near the $51,500 level. The first major resistance is near the $52,000 level.

A successful close above the $52,000 resistance level could open the doors for a larger increase in the coming sessions. The next major resistance could be $53,200, followed by $54,500.

Technical indicators:

Hourly MACD – The MACD is now gaining momentum in the bullish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now well above the 50 level.

Major Support Levels – $50,500, followed by $50,000.

Major Resistance Levels – $51,500, $52,000 and $53,200.

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Source: https://www.newsbtc.com/analysis/btc/bitcoin-turns-attractive-above-50k/

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