Crypto exchange Gate.io confirmed on Tuesday that Ethereum Classic network suffered 51 percent attack. In a blog post, Gate.io confirmed that there has been an attack and it would absorb the loss of roughly $200,000 worth of Ethereum classic – about 40,000 ETC. However, Grayscale Investments, the creator of Ethereum Classic Investment Trust (ETCG) reportedly responded to “a few” client to clear what the attack actually meant.
Reportedly, CoinDesk received a copy of one of the email responses to such an inquiry. The response included mostly a general explanation of how such attacks work. Matt Beck, a product development and research associate at Grayscale also wrote in the mail, “The greatest risk this poses is to the integrity of the Ethereum Classic Network, as people may be less inclined to accept ETC given the increased double-spend risk. However, the coins within the ETC Trust are not at direct risk of theft or double-spending.” However, Grayscale said that all investors in the fund were not sent such notifications.
Beck also explained the reason behind his statement by writing, “Double spending can only be done by the original sender of the coins — so an attacker can only double spend his own coins, not someone else’s,” the Vertcoin developer, Gert-Jaap Glasbergen, said in the article. “So, the main risk of 51 percent attacks and blockchain reorgs is with people [who] accept the blockchain’s asset; and mostly when they do so in large amounts in exchange for virtual goods or services that are non-reversible.”
Beck also referenced a CoinDesk column by Michael J. Casey about the Vertcoin incident, which noted that 51 percent attacks are a risk faced by most proof-of-work blockchains and that some are more vulnerable than others depending on the amount of hashing power that secures the network.
Managing director of Grayscale, Michael Sonnenshein, told CoinDesk through a spokesman that they provided the explanation to the investors who contacted them. “These types of network attacks and their implications are also described in the disclosure documents we provide all investors,” he added.
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