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Businesses The Almighty Buck

Coinbase Suspends Ethereum Classic (ETC) Trading After Double-Spend Attacks (zdnet.com) 116

Cryptocurrency trading portal Coinbase delisted the Ethereum Classic (ETC) currency Monday after detecting a series of double-spend attacks over the last three days. From a report: In layman terms, double-spend attacks are when a malicious actor gains the majority computational power inside a blockchain, which they then use to enforce unauthorized transactions over legitimate ones. According to a security alert published today by Coinbase security engineer Mark Nesbitt, this is exactly what's been happening on the Ethereum Classic blockchain for the past three days, since January 5. Nesbitt says that a malicious actor has carried out 11 (at the time of writing) double-spend attacks during which he moved funds from legitimate accounts to their own. [...] According to Crypto51, it only costs $5,029 to rent enough computing powerto overwhelm the ETC blockchain with your own miners and gain 51 percent hashing power to carry out a double-spend attack.
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Coinbase Suspends Ethereum Classic (ETC) Trading After Double-Spend Attacks

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  • This is just part of the process. The best algorithms and systems will win. Ethereum Classic is what's for dinner.

  • by sdinfoserv ( 1793266 ) on Tuesday January 08, 2019 @09:16AM (#57923844)
    When a physical bank is robbed, everyone who has dollars in their pockets still has whole dollars. The theft had zero effect on the value of your pocket or what you can buy. When a crypto-currency exchange gets hacked (aka robbed), the value of what you own can tumble. Plus, add in the shear insecurity of crypto-currency, and you have the reasons why it's a complete failure and nonsense.
    • by Drethon ( 1445051 ) on Tuesday January 08, 2019 @09:22AM (#57923870)

      When a physical bank is robbed, everyone who has dollars in their pockets still has whole dollars. The theft had zero effect on the value of your pocket or what you can buy. When a crypto-currency exchange gets hacked (aka robbed), the value of what you own can tumble. Plus, add in the shear insecurity of crypto-currency, and you have the reasons why it's a complete failure and nonsense.

      These days when a physical bank is robbed, they have insurance backing up their virtual dollars, as well as tracking that can get back stolen (digital) money in many cases (from what I've been told, not an expert). So while the government can track your transactions through banks, the bank also provides more security. All depends on what you value most.

    • by Anonymous Coward

      A physical bank is small fish. If one of the U.S. Mint printing factories gets hijacked by bad guys, then the value of money in your pocket can tumble. Maybe that would be the correct analogy?

      • Re: (Score:2, Interesting)

        by Anonymous Coward

        Actually, the dollar is very resistant to that. The North Korean government printed "superdollars", almost undetectable forgeries for a decade and had no significant impact on the value of the dollar. There was also another source, probably Iranian, that was printing them in the 80's and early 90's and again, didn't have a huge impact on the value of the dollar.

        • by Anonymous Coward

          If I recall correctly, this was basically because they couldn't *physically* print very many super-dollars. IIRC, it was a situation where 1% of the money in circulation was fraudulent and 100+ Government agents were both tracking the money and the bad actors to remove it/them from the system. The basic problem was that ~1 of the 100+ money-printing systems was a bad actor.

          ETH works differently. Someone with 51% of the network controls the *whole network*, and can very conceivably give themselves *all* o

        • Perhaps you did not pay attention to the decline of the dollar since 1970 ... AFAIK it is now worth a quarter of the value at that time.

      • It's a good thing, then, that we have just a few of those mints and can harden the crap out of them against a hijacking. MUCH better than passing around tens of millions of printing presses and letting people get together to decide what they want to print in their garage...
    • also can't spend it with out tracking.

    • Re: (Score:2, Interesting)

      by Anonymous Coward

      When a physical bank is robbed, everyone who has dollars in their pockets still has whole dollars. The theft had zero effect on the value of your pocket or what you can buy.

      When a crypto-currency exchange gets hacked (aka robbed), the value of what you own can tumble. Plus, add in the shear insecurity of crypto-currency, and you have the reasons why it's a complete failure and nonsense.

      That is incorrect. When a physical bank is robbed you lose your money. The only reason you are protected in the US is because the accounts are insured by FDIC up to $250K. The government (your taxes) foots the robbery loss. And if your safe deposit box is robbed your grandmother's ring is gone for ever.
      Crypto Exchanges also have insurance. So if coinbase is "robbed", insurance kicks in - just like your physical bank. Might not be as good as FDIC but then your taxes are not funding it.

      As for you second poin

      • by bws111 ( 1216812 )

        The FDIC does not insure a bank for robberies, it insures depositors against a bank failure. Also, the FDIC does not get any tax money, the money comes from premiums paid by the member banks (and income from investments made by the FDIC).

      • That is incorrect. When a physical bank is robbed you lose your money.
        No, you don't. The bank branch that is robbed loses a bit of its inventory in bills, that is all.
        If yo have bad luck and they open the lockers in the bank and you have unregistered jewelry that will get stolen and probably not replaced. But your bank account as in balance is not touched at all.

      • FDIC has nothing to do with bank robberies unless someone manages to steal enough money to break the bank (hint: would require stealing a lot). Deposit insurance is to protect against bank runs, which is what really brought on the Great Depression. Ordinary commercial insurance is what repays the bank in case of a cash robbery because it is the bank's money exclusively that gets stolen: the bank's liability to you for your deposits is not lessened by them getting robbed.
    • This is not a case of the exchange getting robbed though, it is the currency itself that got attacked. The problem with proof-of-work is that if someone manages to control over half the mining power, they get to decide which transactions happen and which do not. The theory was that there would never be a single party in that position, but apparently that theory doesn't apply to the less popular coins.

    • When a physical bank is robbed...

      This is less like a physical bank robbery and more like counterfeiting. When a counterfeiter successfully passes bogus cash in large amounts, he affects tha value of the real money, and it *does* have an effect on the value in your pocket.

    • The theft had zero effect on the value of your pocket or what you can buy. When a crypto-currency exchange gets hacked (aka robbed), the value of what you own can tumble.

      This isn't to do with the nature of the crypto-currency as much as it is to do with the supply and demand curve in terms of total trading volume for crypto currencies. If they were used as much as the dollar is then any hack wouldn't have any effect on the price either, .... and the currency wouldn't be as volatile either.

    • by Agripa ( 139780 )

      When a physical bank is robbed, everyone who has dollars in their pockets still has whole dollars. The theft had zero effect on the value of your pocket or what you can buy. When a crypto-currency exchange gets hacked (aka robbed), the value of what you own can tumble. Plus, add in the shear insecurity of crypto-currency, and you have the reasons why it's a complete failure and nonsense.

      This depends on how much is taken in the robbery. Governments can take so much as to devalue the currency taking from everybody in proportional to how much they had.

    • and you have the reasons why it's a complete failure and nonsense

      Hasn't stopped religion, and -- I predict -- it won't stop cryptocurrencies.

  • Is this specific to currencies or is it a fundamental flaw in blockchains?

    • by Anonymous Coward

      this is specific to shitcoins - no security because nobody is interested and nobody mines it - the blockchain is insecure with >50% hashpower controlled by attacker - no problem renting a little bit hashpower to attack insecure networks. you can't really attack this way Bitcoin - you can but that would be extremely costly - and you won't be able to find that much hashpower to rent anyway.
      Btw, ETC is a minority fork of ETH, so nobody cares about ETC and it has near zero use

      • by nagora ( 177841 )

        Your answer isn't completely clear - if 50% is what's needed then that's a fundamental flaw and Bitcoin is only safe while it's heavily used, not through any special design, so it's not "specific to shitcoins", then?

        • by Anonymous Coward

          But if you have majority mining power then you can do what you want seems just natural. Similarly - If you convince enough voters to vote for Trump then is democracy flawed? It's a philosophical question I guess :)

        • by ceoyoyo ( 59147 )

          It's a feature of all "trustless" blockchains. "Feature" meaning a characteristic, which you may regard as negative or positive, depending on who you are.

          A basic blockchain is just a special case of a hash tree, which is a pretty pedestrian linked list except that it's got a set of hashes that make it easy to verify integrity. Git uses a hash tree.

          If you don't want to have some kind of central, trusted authentication then you have to figure out who's allowed to modify the list. Most use a system where inte

      • Re: (Score:2, Insightful)

        by Anonymous Coward

        Btw, ETC is a minority fork of ETH, so nobody cares about ETC and it has near zero use

        Somebody cared enough to marshall enough computing power to overwhelm the network, which is why we are discussing this.

        • I think it is likely someone specifically targeted ETC, because of their argument of "The block chain should always be completely immutable". I'm not sure if you're aware of the histroy of ETH/ETC but the short version is someone hacked a smart contract on ETH and stole a lot of money. It was decided that the transactions that stole the money should be reversed, so the people's money can be returned. However, reverting those transactions require a hard fork of the block chain and a number of people argued t
      • The definition of a shitcoin is one which isn't heavily used. So all you're saying is that Bitcoin is immune to problems specific to shitcoins so long as it doesn't become a shitcoin. But the potential for it to become one certainly exists.

  • If you get enough people (>51%) to vote for you - you can do anything ($$$).

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