Very rarely do we hear the story of a crook returning what he’s stolen. Very rarely do we hear tales of redemption or people feeling guilt and remorse over what they’ve done wrong. Usually, when someone steals something, the item is either gone or recovered under very harsh circumstances. The person at fault is trialed, sentenced, and people are hurt both emotionally and mentally.
What could have been a repeat of this behavior is giving inspiration to crypto enthusiasts everywhere. A hacker who allegedly stole over $1 million in Ethereum Classic funds has promptly returned some of the money without persuasion. At press time, the reason for the return is not yet known or even fully understood, but people are taking it as a sign that perhaps there are people out there who realize the consequences of their actions and are willing to take steps to remedy them.
If only we could say the same regarding past instances, i.e. Mt. Gox and Coincheck. Both took place in Japan roughly four years apart from each other. Both stand as the largest cryptocurrency hacks in history, and to this day, much of the money stolen in each instance has remained hidden or unreturned. The combined losses from both instances stand at over $1 billion, which means a lot of people were cheated out of what was rightfully theirs.
A Small, Yet Noticeable Move Ahead
The story of Ethereum Classic doesn’t compare to Mt. Gox or Coincheck in terms or the amount stolen, but it is good to see a wrong turn into a right, and the situation gives crypto advocates new reasons to hope. While the situation isn’t all rainbows and lollipops (roughly $1 million in ETC funds remains missing), the victims believe the move was a potential “white hat” maneuver – an attempt to help them understand that blockchain security still has lots of room for improvement.
The exchange victimized by the hack was Gate.io, who explained in a statement:
“We still don’t know the reasons. If the attacker didn’t run it for profit, he might be a white hacker who wanted to remind people the risks in blockchain consensus and hashing power security.”
Why 51 Percent Attacks Are Dangerous
The money was stolen through a 51 percent attack on the Ethereum Classic blockchain. These attacks occur when hackers force blockchains to reorganize themselves. The time spent doing so opens doors for attackers to step in and seize control of a network’s transactional power. At the time of writing, it is estimated that over 100 blocks on the ETC chain were reorganized.
During this period, if the attackers gain control of more than 50 percent of the network, they can change and execute transactions at their own will. They can also reverse transactions after they’ve been confirmed through a tactic known as “double spending.”
Approximately 15 attacks have been recorded on the ETC blockchain by leading U.S.-based exchange Coinbase, which believes that roughly 12 of the attacks included double spending. Researchers have commented:
“We believe that due to the recent decline in blockchain funding, the net mining power of the whole network has declined. You have really felt the impact of the 51 percent on ETC, and it is foreseeable that the attack will increase rapidly with the cost of attack reduced.”
Trying to Improve the Situation
While some of the funds have been returned, the blockchain belonging to Ethereum Classic remains vulnerable. Gate.io has taken matters into its own hands to potentially improve safety and security for customers, saying:
“Gate.io has raised the ETC confirmation number to 4,000 and launched a strict 51 percent detect for enhanced protection. We also suggest other ETC exchanges take actions to protect their traders from blockchain rollback and reorganization.”