ETC Network Security Plan – What is Wrong With It?
The plan released by the Ethereum Classic devs could be found in this Medium post.
Defensive Mining seems strange. How is it supposed to be done? For sure it requires a lot of resources (=money). Being among the Top ETC pools nobody has contacted us concerning this matter.
Enhanced Network Monitoring is questionable too. ETC Cooperative has announced the new tool called ForkWatch. All it does is Nicehash hashpower rental price monitoring. This doesn’t seem much helpful and accurate.
Many thanks Yaz for your work on this project!
Learn more below.https://t.co/w1PjA9uTXI
— ETC Cooperative (@ETCCooperative) August 22, 2020
“Permapoint” or “PirlGuard” sounds good. This kind of solution could be implemented quickly and in our opinion will help to protect the network.
We are firmly against the algorithms that support ASIC/FPGA mining. Only GPU-mining is real decentralization. Graphics cards are sold all over the World. Moreover, we could trust these companies and believe they are not cheating. NVIDIA and AMD are solid, well-known companies with over $400 billion total market capitalization.
ASIC’s, on the other side, means centralization. ASIC’s are produced on a couple of Chinese factories. There is usually a so-called pre-mine while the manufacturer uses the newly produced hardware on its own to get some profit. ASIC manufacturers sometimes play unfairly making their products work for specific Chinese mining pools. They don’t care about other pools and provide no support. ASIC distribution network is complicated. ASIC devices always require special facilities. All these factors mean ASIC mining is only for “big players”. Taking into account modest Ethereum Classic capitalization and potential mining profit the transition to the ASIC-mined algorithm would be counterproductive to ETC Network.
The GPU mining community is strong and creates a lot more media effect than the ASIC community. For a good example, let’s remember the ZCash (ZEC) story. While ZEC was mined with graphics cards it was as popular as Ethereum. Nowadays rarely one could hear a word about this coin in the media: most of the mining is done on large ASIC plants, the project development is centered around large mining plants and not around the community.
Ethereum Classic Vulnerability
We’ve discussed this problem multiple times in our blog posts. Attacks that happened in August 2020 were not the first ones. In January 2019 ETC Network was attacked in the same way. The existence of the 51%-attack is absolutely normal for any Cryptocurrency Network. Even Bitcoin could be attacked that way. Just the price of the attack is a lot higher. The main ETC problem is that it is not the dominant coin of the algorithm.
Currently, Ethereum network hashrate is 55 times higher than Ethereum Classic network hashrate.
A lot of miners are not controlling their rigs leasing their hashpower to Nicehash and other mining rig rental services. This gives the hackers the possibility to rent enough hashrate to perform the attack on the ETC network. Ethereum, on the other hand, couldn’t be attacked that way, as there is no such purchasable hashrate available on the market.
ETC Network Protection – Possible Solutions
There are two major possibilities: either the algorithm must be changed or the protection system must be implemented. How to Prevent a 51% Attack
We like the systems to be as simple and transparent as possible. That means we prefer the algorithm change over the protection system implementation. However, that doesn’t mean that the “protection way” is wrong.
The new algorithm must be wisely chosen:
- Ethereum Classic should become the dominant coin of the algorithm.
It is always quite impossible to find the hashrate required to attack the dominant coin of the algorithm.
- ASIC-protection is required.
Only GPU mining could provide the proper decentralization of the network.
Current Ethereum Classic Network State
Nothing has been done so far.
For the time being, the development team behind Ethereum Classic have released a Network Security Plan, a proposal aimed to outline possible actions to prevent such attacks in the future, when the proposed changes will be decided on and implemented.
Ethereum Classic Network is still as vulnerable as it was before. The only difference is that now coin developers, exchanges, and mining pools pay more attention to the current network state and monitor it to prevent the new possible losses.
Major exchanges like Binance have put the coin on hold freezing the deposits and withdrawals. Mining pools have increased the number of confirmations (new blocks on the network) to confirm the rewards. 2Miners now requires 10 000 new blocks to confirm the Ethereum Classic balance. ETC payouts are processed 1 time every 24 hours (not every 2 hours as before).
Why are these actions necessary?
Obviously, we don’t want to lose money. Not only the exchanges are under attack. Being the Top-3 Ethereum Classic pool attacks cost us too much. Just during the second attack we’ve lost more than monthly ETC income. Imagine other mining pools loss as well. According to our investigation, all ETC mining pools together have lost almost $100 000 during these attacks in August.
Nobody from Ethereum Classic aims to compensate for these losses.
Conclusion – 2Miners Suggestions
We would like Ethereum Classic Developers to listen to the companies that provide value to the Network infrastructure — a good example of this would be mining pools and Cryptocurrency Exchanges.
We aim to provide a transparent and stable infrastructure for our miners and the network as a whole. While we could support ASIC algorithms in our pool if such a decision will be made, we’re striving for broader decentralization only possible through multiple independent small miners as opposed to large ASIC mining operations/factories.
Changing the algorithm from Ethash could be the solution but then it will automatically mean Ethereum Classic loses any chances to become the logical successor to Ethereum mining once the latter switches to PoS. So each direction has to be carefully evaluated by the community and for sure ranged against existing offers on the leased hash power market, otherwise, there is no gain in the algorithm switch whatsoever. We also think the decisions have to be done quickly — the more delays we have, the less prone to attacks the coin is.