Earlier this week, Ethereum Classic turned out to be the most controversial cryptocurrency in the market. The leading coin was under the community’s scrutiny as its blockchain succumbed to a deep chain reorganization that included double spend. The announcement regarding the 51% attack was first made by Coinbase, a leading cryptocurrency exchange platform in the US, stating that they have stopped all services for the coin in order to protect their customers’ funds.
However, post the announcement, the main highlight was the possibility of other Proof-of-Work going through a similar attack, especially on Bitcoin [BTC]. This comes across as a concern associated with the largest cryptocurrency as it deploys the Proof-of-Work [PoW] algorithm. In the whitepaper, Satoshi Nakamoto had stated:
“If a majority of CPU power is controlled by honest nodes, the honest chain will grow the fastest and outpace any competing chains. To modify a past block, an attacker would have to redo the proof-of-work of the block and all blocks after it and then catch up with and surpass the work of the honest nodes.”
This effectively means that the security of the network relies on whether more than 50% miners follow the instructions laid down in the whitepaper or not. Additionally, this does not apply only to Bitcoin; it stands true for all the cryptocurrencies using Proof-of-Work algorithm, including Ethereum [ETH]. The dependency over the honesty of the miners is often considered as the vulnerability of the Proof-of-Work mechanism.
Jimmy Song, a core developer of Bitcoin, said on Twitter:“51% attack on BTC is really hard. Not only do you have to get 51% of the hash power in terms of mining equipment, but you also have to get access to enough electricity to feed those machines. Over time, this is going to be the much harder thing to obtain.”
Vitalik Buterin, the creator of Ethereum, stated that the reason Ethereum has not been attacked yet is its large size, on his official Twitter handle.
“ETH’s large size is why it has not yet been attacked. This 51% attack shows that 51% attacks are possible even on fairly large chains, increasing the risk that in the future PoW will be unsafe even for us.”