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Ethereum Classic [ETC] 51% attack: Hackers return $100,000 in tokens

Namrata Shukla

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Ethereum Classic [ETC] 51% attack: Hackers return $100,000 in tokens
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The recent 51% attack against Ethereum Classic [ETC] blockchain last week shook the cryptocurrency community and the hacker or the organization behind the act has now returned 100k USD worth in tokens.

The hacker has not provided any information about the reason behind this change of heart and returning the money in ETC to the firm’s account, reported Exchange Gate.io, an official blog of the cryptocurrency on January 10.

Even after repeated attempts to get in touch with the hacker or the organization behind this wrongful attempt, Gate.io was unable to contact them. The Exchange remained unsuccessful in providing any explanation for receiving the money and to understand the motivation of the hacker behind it.

However, as there is no proper reasoning behind the debited amount, and many speculate that it may have been a campaign to raise awareness about the risks associated with the use of cryptocurrencies, including trading and the security of a blockchain through Proof of Work. The article on the blog read:

“On Jan.10, we found that the recent ETC 51% attacker returned 100k USD value of ETC back to Gate.io.
We were trying to contact the attacker, but we haven’t got any reply until now.
We still don’t know the reason. If the attacker didn’t run it for profit, he might be a white hacker who wanted to remind people the risks in blockchain consensus and hashing power security”.

The Exchange’s team explained to the readers that this attack might take place again as it is not very expensive to rent the required hash power to gain control over 51% of the blockchain. In order to not let this happen in the future, Gate.io raised the number of confirmations needed to admit a transaction to 4,000 with some other protective measures. They stated:

“Based on our analysis, the hashing power of ETC network is still not strong enough, and it’s still possible to rent enough hashing power to launch another 51% attack. Gate.io has raised the ETC confirmation number to 4000 and launched a strict 51% detect for enhanced protection. We also suggest other ETC exchanges to take actions to protect the trader from blockchain rollback/reorg.”





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Coin Metrics data reveals inaccuracies in Kik’s claim of being as dominant as BTC, ETH blockchains

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Upon investigating Kik’s claims in response to SEC’s lawsuit filed earlier this month, CoinMetric data reported inconsistencies in the on-chain activity and adoption rate of its native token, Kin.

In a study dubbed, “An Analysis of Kin’s On-Chain Activity,” the crypto-asset elaborated on the two assertions made by Kik in its letter to the US Securities and Exchange Commission.

Kik’s first claim was regarding its blockchain activity. Its in-house token, Kin, supposedly exceeded Ether and Bitcoin to record the fifth highest daily blockchain activity. This was debunked by CoinMetric’s investigation after taking into account its “Operation Count” [the same metric used by Kik to support their claim] and “Transfer Value.”

In terms of the Operation Count, the report explained,

“According to Kik’s source for the metric, “blockchain activity” is defined as “the number of operations on the blockchain in the last 24 hours.” Operations are broadly defined as any type of action that could be recorded on chain. But operations are not standardized across blockchains which makes comparing across chains difficult.”

Besides, drawing parallel comparisons across blockchains with radically different use cases and operations is difficult.

Although Kik’s original research showed a high number of account creations, Coin Metrics data revealed that many of these accounts were empty.

Additionally, Kin’s “create account” operation has a fee of .001 Kin. The report highlighted that a metric such as “operations count” for the purpose of blockchain activity cannot be used as a measurement tool since Bitcoin and Ethereum blockchains do not track account creations on-chain.

In terms of Transfer of Value, the report elaborated,

“Theoretically, high daily transfer value should signify high activity. But transfer value is often quite noisy, especially on low fee blockchains where there are minimal costs to sending transactions. Some transfers might simply be users moving money around between addresses they own”

Instead, Coin Metrics contrived “adjusted transfer value” metric to eliminate what it called, “noise and certain artifacts like self-sends, or deliberate spammy behavior.” Coin Metric noted that this gives a clearer picture of the on-chain activity, resulting in a decreased transfer value when compared to other blockchains, even if it had a high number of daily blockchain operations.

Additionally, Kin’s average transaction value was also low, when compared to other blockchains. For the first claim, Coin Metrics concluded that the Kin platform had more micro-transactions than Bitcoin and other dominant blockchains, while highlighting the fact that the latter blockchains are not primarily used for such transactions.

Regarding Kik’s second claim that said that over 300,000 users were earning and spending Kin as a currency, Coin Metrics assessed its blockchain usage. The number of addresses is not necessarily equal to the number of users since a single user could have multiple addresses. Hence, Coin Metrics took the number of active users into account, which the report defined as “the number of unique addresses that were active in the network [either as a recipient or originator of a ledger change] during that day.” The report noted,

“Kin 2 has significantly more originating active addresses than Kin 3. Although Kin is in the process of migrating to Kin 3, it appears that Kik is using data from the Kin 2 chain to support their claims about usage.”

Further, Kin 2 and Kin 3 had more active addresses that received payments than originated payments, which meant that there were more “earners” on Kin than “spenders,” also noting that only 35,000 addresses held over 10,000 kin [nearly $0.23]. The report added that the figures are lower than other blockchains which have a minimum of 1,000,000 addresses with at least $1.

After examining multiple critical aspects, Coin Metrics concluded that Kin fell below dominant blockchains in terms of daily active addresses, despite maintaining steady growth. It said,

“A majority of Kin’s active addresses have small account balances. While this makes sense for a network built around micropayments, when viewed across multiple metrics, our data show that Kin is not more widely used than dominant chains such as Bitcoin or Ethereum.”





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