Ethereum Classic suffers yet another 51% attack. Time to call it?
ETC prices remain high despite repeated demonstrations of why it's functionally worthless.
Ethereum Classic has suffered another 51% attack, for the second time this week, in which another few hundred thousand dollars' worth of ETC was stolen.
Ethereum Classic spokespeople quickly reassured the public that despite some changes to its distributed ledger, Ethereum Classic still retains the same low calories and great taste as always.
ETC Labs, meanwhile, has vowed to bring in some central authorities to find and bring back their immutability.
The attacks against Ethereum Classic are crimes. We will investigate and the entire community will help. The attackers and related parties will be held responsible.
— Ethereum Classic Labs (@etclabs) August 6, 2020
It's all somewhat ironic given that the sole reason Ethereum Classic decided to schism away from Ethereum was to go in search of true immutability.
ETC prices did not respond to the second attack, but pitched 13% down following the first one earlier this week. It's weird that prices responded at all though, because it implies that this 51% attack was unexpected.
Why hasn't ETC plummeted?
ETC got roiled by an unusual set of 51% attacks in January 2019, when its hashrate was more than twice what it is now. And even then, it was very clear that Ethereum Classic had no plan for preventing future attacks.
Since then, Ethereum Classic's hashrate has plunged further, most recently with the late-July departure of OpenEthereum from the project, which people warned at the time would leave Ethereum Classic vulnerable to attack.
This has turned out to be spot on.
Right now, it's not clear what purpose Ethereum Classic serves. It is a demonstrably broken blockchain with no applications other than a handful of games and integrations. It has no foreseeable future other than being gradually broken down by chain reorganisation attacks while ETC Labs helplessly shakes its fist at the attackers. There is a 0% chance of a serious person making the serious decision to build a serious application on Ethereum Classic unless they also have serious lead poisoning.
There are many other similarly pointless coins in the top 30 cryptocurrencies by market cap (ETC is ranked 26 at the time of writing), but none of them is so clearly broken at its base.
So why haven't ETC prices plummeted?
Part of it might be because the bulk of Ethereum Classic holders are having too much fun elsewhere to worry about ETC. Another part of it might be a reluctance on the part of large funds to concede that those coins are basically worthless.
For example, Grayscale has about $85 million of ETC under management, roughly 10% of the total ETC market cap, earning a 3% management fee (worth ~$2.5 million) per year. There are doubtless many more millions of dollars of ETC left buried elsewhere.
At a certain point though, it's probably time to call it a day.
Disclosure: The author holds cryptocurrencies including LINK at the time of writing