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ETC Labs believes regulation is the key to preventing future 51% attacks

ETC Labs believes regulation is the key to preventing future 51% attacks

Responding to quite a few 51% assaults on the Ethereum Traditional blockchain, ETC Labs stated that it is time to deliver regulation to hashpower rental marketplaces, citing the truth that at the least two of the assaults have been perpetrated by renting hash energy by NiceHash — a declare that has been confirmed by each NiceHash and ETC Labs. 

ETC Labs CEO Terry Culver additionally shared with Cointelegraph that based on the knowledge that was supplied by CipherTrace, which was employed to research the assaults, the attackers used proceeds from the primary assault to lease hashpower for the second assault. The latter value crypto change OKEx $5.6 million in damages — the corporate needed to reimburse its customers.

The concept of utilizing a hashpower dealer to conduct an assault on a proof-of-work blockchain isn’t new. As an example, at a latest Unitize digital convention, there was a panel devoted to this subject and an earlier assault on Bitcoin Gold was mentioned.

As a way to study NiceHash’s response to the issue, we interviewed the corporate’s chief advertising and marketing officer Andrej Skraba. He informed us that whereas NiceHash’s crypto change is a regulated entity and as such follows all correct Know Your Custome or KYC and Anit-Cash Laundering procedures or AML, its hash rental enterprise is unregulated and its customers usually are not required to reveal their id. We requested if the corporate would contemplate instituting such procedures in response to the assaults, Skraba responded:

This can rely completely on the European Union, what they’ll resolve on this regard.

He additionally identified {that a} good analogy for NiceHash could be an Web Service Supplier, or ISP, that merely delivers information packets:

NiceHash can ship packets of knowledge to mining swimming pools and these packets of knowledge might be described as hash energy. <…> So if we actually need to be constructed a really decentralized world, we can not impose limitations on this visitors.

He added that it is vitally tough for a dealer like NiceHash to detect such assaults as they occur. It’s much more difficult to stop them from occurring within the first place. Skraba admitted that instituting correct KYC and AML would assist cut back the dangers. Nevertheless, in his opinion, it will not clear up the problem:

You may at all times use pretend KYC. So it will assist, however it will not cease. It could not cease in any respect.

Presently, ETC’s hashrate stands at 1.four Th/s. In the meantime, NiceHash market has nearly 10 Th/s accessible for rental, which is seven occasions the present quantity of hashpower defending the community.

ETC hashrate. Supply: BitcoinCarts.

Skraba stated that NiceHash has launched ETC Labs to their platform. Although they weren’t beforehand acquainted, ETC Labs now intends to make use of their providers for defensive mining:

Now we have launched them to our service as a result of earlier than they weren’t conscious of how NiceHash works. And so they have additionally publicly said that they’ll use defensive mining.

The concept behind defensive mining is to make use of a dealer like NiceHash to extend the community’s hashrate to be able to make potential assaults prohibitively costly.

Though regulation might cut back the probability of future assaults, that is extra of a long-term plan. Not solely does it take time for the suitable legislators and regulators to provide you with a correct framework, however within the case of hashpower brokers, it must be world to be efficient. For instance, NiceHash is predicated in Slovenia. If the native authorities or the EU enacted a regulatory framework affecting its enterprise, the corporate may simply relocate to an unregulated jurisdiction. The decentralized and digital nature of the enterprise makes bodily location irrelevant.

Different options which are being mentioned by the ETC neighborhood embody a checkpointing system (that may manually forestall future assaults), switching to a distinct hashing algorithm, and at last, strategic strikes just like the establishment of a decentralized treasury.

Some consider that the final assault was performed by ETH miners. As the 2 forks use the identical DaggerHashimoto hashing algorithm, and ETH enjoys a significantly larger hashrate, it will be fairly simple for ETH miners to assault the much less lucky fork. Tomorrow’s ETC builders’ name shall be devoted to discussing the checkpointing system proposed by IOHK.

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