Potential 51 Percent Attack on Minnow Cryptocurrency Electroneum
An odd occurrence happened within the Electroneum (ETN) community this past April Fool’s day, though it was definitely not a prank. Empty blocks began getting mined by an unknown party, which should only be possible if someone is controlling the chain. The reasoning behind this is unclear, besides just to stir unrest in an already uneasy community watching their crypto plummet day-by-day.
The interesting part of this story, however, is that this should only be possible via a 51 percent plus ownership of their blockchain. Most blockchains see this sort of attack as a death knell for their coin, as the consequences of a bad player owning more than 50 percent of a chain means that the trustworthiness of their crypto is now at zero.
Once a miner owns the majority of the chain, they are then able to double spend the coin as they are now able to privately mine their own blocks on the chain. It’s as simple as sending a transaction to a merchant and at the same time set up their own private chain, which operates faster than the rest of the network as they are over 51 percent of the processing power available and now both transactions are valid according to the chain.
This has not yet occurred on the Electroneum chain, however the potential is there and no one is quite sure what is going on with these empty blocks. The current suspect for this attack is Bitmain, who now owns a large chunk of the Electroneum chain, as a result of the X3 miner they announced recently. Electroneum is a fork of Monero, inheriting the CryptoNight hashing algorithm.
Under Attack During Wider Market Decline
Electroneum is set up as sort of the novice’s first foray into cryptocurrency. Mining is done through a mobile app and educational games about mining cryptocurrencies, with a plan to break into larger gaming and gambling markets in the future. The ICO for this project sold quite well, but recent developments have disappointed investors.
The news of this potential attack is occurring during what was already a huge rough patch for the coin, dropping from a peak of $0.20 in January 2018 down to $0.019. Potentially, with this news factored in, a price below $0.010 is entirely possible which drops them below their original price.
Furthermore, a long freeze on funds and deposits that were held in ETN wallets on Cryptopia, one of the two big exchanges for ETN, sent holders into a panic on whether or not their funds were scammed by the company. However, as of later in the afternoon of April 2, this has been solved.
Electroneum has two directions in which it can go at the moment. If the blockchain issue is solved and it turns out this was not a majority attack on the chain, then the potential for an increase back to higher levels is still possible. However, if the developers cannot come to a solution for the problem, then the coin is doomed. Electroneum’s CEO vowed to fight the ASICs in a YouTube statement.
At the moment, though, investing in Electroneum is quite the risky gamble – even compared to the overall cryptocurrency market.