Ethereum Classic (ETC) was born in controversy and has lived much of its life in it. Created in 2016 after Ethereum’s infamous DAO hack and subsequent hard fork, Ethereum Classic retained the “code is law” philosophy of the original chain. While Ethereum (ETH) moved forward, ETC became the chain for purists who opposed altering history.
But ETC’s commitment to immutability has come with a price: multiple devastating 51% attacks. Between 2019 and 2020, Ethereum Classic suffered several reorganizations of its blockchain, allowing attackers to double-spend millions of dollars’ worth of ETC and undermining confidence in the chain’s security.
This article explores what a 51% attack is, why Ethereum Classic was vulnerable, how the attacks unfolded, their impact on investors and exchanges, and what lessons they hold for blockchain security.
What Is a 51% Attack?
A 51% attack occurs when a single entity gains majority control of a blockchain’s mining or hashing power. With that control, attackers can:
-
Reorganize the blockchain by creating an alternate chain with more cumulative proof-of-work.
-
Reverse their own transactions, enabling double-spending (spending the same coins twice).
-
Disrupt network confirmations, undermining trust.
They cannot, however, steal coins from other wallets directly or create new coins outside the protocol.
In proof-of-work systems, security depends on the assumption that no malicious party can cheaply acquire majority hash power. If that assumption fails, the blockchain becomes vulnerable.
Ethereum Classic: A Vulnerable Target
Ethereum Classic emerged after Ethereum’s hard fork in 2016. While Ethereum gained massive developer support, Ethereum Classic remained smaller in both community size and hash rate.
Key vulnerabilities:
-
Low Hash Rate
Compared to Ethereum or Bitcoin, ETC’s mining power was relatively small. This made it economically feasible for attackers to rent hash power from platforms like NiceHash to temporarily control the network. -
Exchange Listings
ETC remained widely listed on major exchanges. This gave attackers liquid venues to double-spend coins for profit. -
Philosophical Division
ETC’s commitment to immutability meant it resisted controversial interventions, even after attacks, making it a tempting target. -
Lagging Development
With fewer developers and resources than Ethereum, ETC’s defenses against advanced attacks were weaker.
The First Major Attack: January 2019
In January 2019, Ethereum Classic suffered its first widely publicized 51% attack.
-
Attackers reorganized over 100 blocks of the blockchain.
-
Double-spending of approximately $1.1 million in ETC occurred.
-
Major exchanges, including Coinbase, temporarily halted ETC deposits and withdrawals.
Coinbase publicly confirmed observing deep chain reorganizations, sparking widespread alarm. For many investors, it was the first time a top-20 cryptocurrency had been compromised so directly.
The 2020 Onslaught: Three Attacks in a Month
If 2019 was a warning shot, 2020 became a full-blown crisis.
Attack 1: July 31, 2020
-
Attackers reorganized over 3,500 blocks — roughly 14 hours of transaction history.
-
Double-spend losses estimated in the millions.
-
Exchanges again froze deposits and withdrawals.
Attack 2: August 5, 2020
-
Just days later, another attack struck.
-
Over 4,000 blocks reorganized.
-
Network confidence deteriorated further.
Attack 3: August 29, 2020
-
A third attack within a month.
-
More than 7,000 blocks reorganized — equivalent to two full days of ETC transactions.
Each attack demonstrated the ease with which rented hash power could overwhelm ETC’s defenses. For exchanges and investors, the message was grim: Ethereum Classic was under siege.
The Mechanics of the Double-Spends
Attackers typically followed this playbook:
-
Acquire Hash Power
Rent large amounts of GPU hashing power from marketplaces like NiceHash, where miners sell excess capacity. -
Send ETC to Exchange
Transfer ETC to a major exchange account. -
Sell ETC for Other Crypto or Fiat
Trade ETC for Bitcoin, stablecoins, or cash. -
Launch a Private Chain
Simultaneously mine a private chain in secret, excluding the transaction that sent ETC to the exchange. -
Release Private Chain
Once the exchange withdrawal cleared, publish the private chain with more accumulated proof-of-work. The network switches to the attacker’s version, effectively reversing the deposit. -
Profit from Double-Spend
The exchange is left with invalidated ETC, while the attacker keeps both the withdrawn funds and the original ETC.
Exchange Reactions
The repeated attacks forced exchanges to implement drastic measures:
-
Extended Confirmation Times: Exchanges required thousands of confirmations before processing ETC deposits, sometimes delaying transactions for days.
-
Higher Security Costs: Verifying ETC transactions became impractical compared to other coins.
-
Delistings: Some exchanges quietly delisted or restricted ETC trading due to ongoing risk.
The very utility of ETC as a tradeable cryptocurrency was undermined.
The Investor Fallout
For ordinary investors, the attacks created chaos:
-
Frozen Funds: Deposits and withdrawals stuck for days due to security delays.
-
Price Volatility: ETC prices plunged after each attack, wiping out billions in market cap.
-
Erosion of Trust: Many investors abandoned ETC, viewing it as too insecure to hold long term.
-
Reputational Stain: Even those who believed in ETC’s philosophy struggled to justify exposure to repeated hacks.
Community Response and Countermeasures
The ETC community faced a dilemma: how to defend against further 51% attacks without betraying the chain’s purist principles.
Proposals included:
-
Modified Consensus Algorithms
-
Exploring hybrid proof-of-work and proof-of-stake mechanisms.
-
Considering “checkpointing” to anchor blocks in trusted validators.
-
-
Longer Block Times and Confirmations
-
Increasing time and cost required for reorganizations.
-
-
More Active Development
-
Calls for renewed developer engagement to harden the chain.
-
In late 2020, Ethereum Classic Labs introduced a series of security upgrades under “ECIP” improvement proposals, aiming to make attacks more expensive.
Why Ethereum Classic Was Targeted Repeatedly
-
Low Security-to-Value Ratio
ETC’s market capitalization was large enough to make double-spending profitable but small enough that attackers could cheaply rent the hash power required. -
Hash Rental Services
Platforms like NiceHash lowered barriers, making 51% attacks accessible to well-funded attackers. -
Exchange Accessibility
Major exchanges continued to list ETC, providing liquid venues for monetizing double-spends. -
Symbolic Weakness
Attacking Ethereum Classic sent a symbolic message: blockchains with low hash power are perpetually vulnerable.
The Broader Lessons for Blockchain
The Ethereum Classic saga holds lessons beyond a single chain:
-
Proof-of-Work Isn’t Invincible
Security depends on hash power distribution, not just cryptography. Smaller chains are vulnerable. -
Rentable Hash Power Is a Threat
Marketplaces that allow easy access to massive mining capacity make attacks easier to coordinate. -
Exchanges Bear the Risk
Ultimately, exchanges absorbed most double-spend losses, highlighting systemic vulnerabilities in crypto infrastructure. -
Community Size Matters
Development resources and community engagement are critical for resilience. Smaller projects struggle to defend themselves.
The Future of Ethereum Classic
Despite attacks, ETC remains active. Its advocates argue it is the true continuation of Ethereum’s original chain, preserving immutability. Yet its repeated security breaches leave questions:
-
Can ETC attract enough miners to deter attackers?
-
Will exchanges and institutions continue to support it?
-
Is a hybrid or alternative consensus model necessary for survival?
Ethereum Classic’s story underscores the fragility of blockchains without broad community and economic support.
Conclusion
Ethereum Classic’s multiple 51% attacks were more than isolated breaches — they were existential challenges. They revealed how low hash power and rentable mining capacity can render a blockchain fundamentally insecure.
For investors, the attacks were devastating. For exchanges, they were costly. For the blockchain industry, they were a wake-up call: not all proof-of-work systems are equally safe.
The lesson is sobering: decentralization and immutability are noble ideals, but without sufficient security, they can crumble under the weight of real-world adversaries. Ethereum Classic survives, but its scars remain a permanent reminder that in blockchain, trust is earned block by block — and can be shattered overnight.
