CRYPTO MOVERS AND PRICES
Crypto saw a modest pullback this morning as bitcoin struggles to spend significant time above USD 12,000. Spot volumes remain well-below the 30-day average.
CRYPTO STORY OF THE DAY
Ethereum classic (ETC) has undergone a slew of 51% attacks in the last few weeks. Surprisingly, the ETC token, which forked from ethereum in 2016, has seen little pressure.
A 51% attack is roughly when miners controlling more than 50% of hash power in a blockchain take malicious control. This means that they’re able to stop transactions from happening and manipulate the history of the blockchain, conceivably in a way to financially benefit themselves. ETC has been reported to have been undergoing such an attack for at least the last 2-weeks.
In the ETC attack, the hacker appears to be sending coin to exchanges and then performing a “reorg” on the blockchain and sending the coin back to a wallet before repeating the process. Estimates suggest the hacker has been able to generate approximately USD 5 million equivalent of illicit gains through the attacks. ETC has been subject to several similar episodes in the last 2 years. Somehow, ETC token price has been relatively flat through the ordeal and market cap remains north of USD 800 million.
It is nothing short of shocking that price hasn’t declined further in ETC. Effectively, at this point, no one can have any certainty in the truth of the blockchain making it effectively useless. For the scheme to work there does have to be some actual buyers of ETC. One begins to question, who in the world these people are that would wittingly participate? The possibilities seem to range from existing ETC holders supporting their large positions of ETC to those that may be confusing the token with ETH. Either option illustrates extreme inefficiencies in crypto valuations.