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See which cryptocurrency can “inherit” Ethereum miners

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7 months ago

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Holders of ETC, the cryptocurrency on the Ethereum Classic network, are closely monitoring their blockchain mining activity as the imminent migration of Ethereum and its transition to the proof of stake (or PoS) consensus mechanism puts the six-year-old cryptocurrency in evidence.

The drastic increase in activity could signal a shift in focus of cryptocurrency miners from “normal” Ethereum. It can also reduce the risks of the famous “51% attack” on Ethereum Classic, which have already been implemented on the blockchain in the past.

The hash rate — a measure of computing power used per second to mine a cryptocurrency — on the Ethereum Classic network hit a record high on Thursday.

According to data from crypto market intelligence firm Messari, the ETC hash rate was 42 terahashes or 42 trillion hashes per second.

The previous high was 28.32 terahashes in May 2021, coinciding with an all-time high in the ETC price of $118.Ethereum Classic network hash rate (Image: Messari)

A likely reason for this uptick in activity is the fact that the merger will leave Ethereum miners to hell with expensive creator hardware for proof of work (or PoW) blockchains that will be useless in the new PoS model.

While some miners will want to create an Ethereum fork to secure their livelihood, others will be able to implement their equipment to mine other cryptocurrencies such as ETC.

Ethereum Classic is a fork of the Ethereum blockchain launched after the history of Ethereum was reversed and relaunched in 2016 following the hack of The DAO project, creating a split in the Ethereum community.

Ethereum Classic Attack Risk

Because Ethereum Classic is not among the biggest cryptocurrencies — it is the 19th largest in the industry, according to website CoinGecko — many crypto analysts are concerned that it is vulnerable to a 51% attack, in which a single person or group can obtain control of a blockchain by taking care of much of the validation of transactions.

While any blockchain can face this type of attack, they are more susceptible on PoW blockchains like Ethereum Classic, Bitcoin and — in the coming weeks at least — Ethereum.

However, a 51% attack on Bitcoin is more unlikely due to the size of the blockchain and the sheer cost of computing power needed to break into the network.

Ethereum Classic has been targeted by these attacks before, in January 2019 and in August 2020.

Crypto analysts weigh the risks of another attack on Ethereum Classic in this era of merger. A codebase contributor to Ethereum Classic, “meowbits”, recently published a detailed assessment of the risks of 51% attacks on ETC.

“Ethereum plans to move to proof of stake in the near future, forcibly evicting its mining interests,” according to the report.

“As the second largest cryptocurrency application of this hash power, it is reasonable for ETC to expect its hash rate to increase at least on the part of these abandoned miners.”

“If Ethereum Classic achieves the dominant application position in terms of hashes power, its risk exposures would be minimized,” he adds.

In other words, the recent flurry of activity on the ETC blockchain is a good sign as the high hash rate protects networks from attacks.

Relative to the currency itself, ETC hit its highest in four months recently — a consequence of the merger. ETC is currently priced at $37.81, according to CoinGecko.

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