Every transaction made with Bitcoin can be done only once and it is guaranteed that no one can spend the same coin twice. The transactions are usually recorded in a database called a blockchain that can be accessed by anyone. This is bound to keep everyone honest.
However, on Monday the cryptocurrency had fallen victim to an attack where people were able to spend the same coins twice. So, the cryptocurrency trading hub Coinbase said they would not be trading in Ethereum Classic due to this.
Blockchain experts says that virtual coins are secure only if the people are honest in maintaining the blockchains that record the cryptocurrencies. This is not good for Ethereum Classic as it cannot be traded on Coinbase which is the major exchange for all types of cryptocurrencies from now on.
Coinbase security engineer Mark Nesbitt’s posted in his blog that the attackers are able to spend the coin two times due to what is known as a 51 percent attack. In order to perform this the attackers must gain control of more than half of the processing power that computes and stores the Ethereum Classic blockchain. This enables them to create an alternative transaction for some coins, necessarily spending them twice.
A Twitter account for Ethereum Classic claimed that it had detected a problem, however it did not consider it as a 51 percent attack and have not seen any indications of double spending coins. Coinbase detected double spends but they did not connect with ETC personnel regarding the attack.
The coins that attackers spent twice were about $460,000 worth. It is important to note that such types of attack are not just prone to Ethereum Classic alone, but can be faced by all cryptocurrencies.
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