It has been a field day for the newsrooms after it emerged that Ethereum Classic (ETC) was under a 51% attack. The “system lapse” saw a double-spent of over $500 worth of classics coins. To protect its users from loses; Coinbase was prompted to suspend any ETC transactions.
On 1/5/2019, Coinbase detected a deep chain reorganization of the Ethereum Classic blockchain that included a double spend. In order to protect customer funds, we immediately paused movements of these funds on the ETC blockchain. Read more here: https://t.co/vCx89dz44m
— Coinbase (@coinbase) January 7, 2019
This is not the first attack to be recorded in the crypto verse with many having been reported in the past. However, this is the first one in 2019 and comes at a time when investor confidence was starting to creep in. This could lead to another frustrating quarter in the market as investors and fresh adopters shying from repeat attacks.
Delayed Crypto Investor Uptake
Going by the mantra “security begins with you”, it is likely that investors are going to hold on to their funds until such security breaches are done away with. This might disappoint ETC watchers and they will hold on to their money for longer.
The other likely option is for the crypto aware investors to look for platforms that are secure enough to give them peace of mind. However, this occurrence might slow down the recovery pace of the market. With crypto hype spreading like bush fire, the entire market will see a lot reduced activity before the investor is sure their funds are secure.
Coinbase Timely Move is a Crypto Plus
Coinbase timely action to suspend ETC is highly commendable; it seeks to safeguard the interests of its client base as well wooing more to onboard. Crypto is still at its early stages and there are many interested parties sitting on the wall for the right time to dive in.
High profile corporations and institutions are keen on any crypto developments and such attacks are not going well with their staking decisions. It becomes tricky for them to integrate their systems with platforms that are not 100% foolproof and this is what Ethereum Classic proved.
What lacks in the market is a constant flow of money from all quarters. A single attack exposes the markets’ underbelly and this will end up stagnating growth. The Coinbase move is a clear signal that investors should be wary of where they put their money going forward.
Silent Market Share Beneficiary
The Ethereum Classic (ETC) attack might weaken the ecosystem value but there are other options in the market. Bitcoin, for instance, is set to reap big out of the flaw since it is one of the most secure coins globally. Bitcoin is the only coin that has retained the Cryptocurrency and blockchain vision so far.
The success of any crypto outfit is backed by sound security. This is the only way high profile investors are able to build trust before investing. However, not all altcoin communities are pro-BTC as its monopoly would mean their sudden death.
The survival of Ethereum Classic now lies on the development team. However, the ETC price has remained stable despite the “system lapse”. It could be too early to conclude that all is well but time will tell the direction the price action takes going forward.