After suffering two major blockchain reorganizations over the past week, Ethereum Classic (ETC) has seen its hash rate plummet — exacerbating the risk of further 51% attacks targeting the network.
As a consequence of the ETC’s miner capitulation, the estimated cost of executing a 51% attack targeting Ethereum Classic using hash power rented from NiceHash has fallen from $12,000 per hour as of yesterday to less than $4,000, according to Crypto51.
Despite this, the price has been unaffected by the apparent fragility of the network, with the crypto asset actually gaining more than 2% over the dollar since news of the second reorganization attack broke yesterday to currently trade for $7.21.
Exchanges report $800M in 24-hour ETC volume
24-hour trade volume is up roughly 10% from the level posted only a few days before the first 51% attack, with orders continuing to execute across most top exchanges, including Coinbase Pro, Binance, Okex, Bitfinex, and KuCoin.
The increase in trade activity comes despite the suspension of withdrawal, deposit, and margin funding services among a number of leading crypto exchanges.
ETC posts wishy-washy market signals
The strength of ETC’s markets despite exchange’s having disabled wallet activity raises questions about whether algorithmic bots may be driving much of the current trade activity.
In 2019 a report published by Blockchain Transparency Institute estimated that Ethereum Classic was among the three-most wash-traded crypto assets — with more than 80% of volume having been flagged as suspicious.
Ethereum Classic miners capitulate
After hovering between roughly five and six terahashes per second (TH/s) through July, ETC’s hash power dropped to approximately four TH/s over the past seven days after news of the initial 51% attack broke.
A second attack yesterday saw hash power spike up to 9 TH/s, before plummeting to less than 2.5 TH/s.
Ethereum Classic hash rate – Source: 2miners
Similarly, the hashing rate available for hire on NiceHash is now equal to more than triple the power needed to attack the network, while NiceHash’s power equated to 132% of the power required to capture 51% ETC’s hash rate.
Numerous mining pools also have disabled ETC payouts and encouraged miners to switch over to Ethereum (ETH) in response to the second attack.