Technology

A Strange Cryptocurrency Heist Ends In $500,000 Of Ethereum Classic Stolen

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One weird trick that bankers hate just purloined half a million dollars (or perhaps as much as $1.1 million) for a cryptocurrency miner, which gives us a great excuse to talk about heists, make “one weird trick” jokes, and use silly “hacker” stock images. But the way in which the money was stolen is particularly strange.

The money was stolen in Ethereum Classic (ETC) currency using a “51 attack” which appears to have peaked once on Sunday and again on Monday. A 51 attack is when one person (or several working together) control more than half of a cryptocurrency blockchain’s computing power. That person can then “roll back” transactions that have already occurred, meaning they can spend the currency and then erase records of their spending or otherwise alter records to benefit themselves.

It appears that this miner [Private (0x3ccc8f74) ETC Miner] may have been involved, as they controlled more than 50% of the $550 million Ethereum Classic blockchain at times on Sunday and Monday, in spikes of the hashrate (computing power) that were so large they dominate a chart of top miners of the cryptocurrency. Many of the blocks created by the miner were reportedly empty, meaning the miner was inflating their share of computing power without processing actual transactions.

Normally the financial incentive for being a top miner is simple and legal: if you provide computing power, you make money in tokens of the currency, which has led to some strange mining setups (like people heating their homes with the heat output of their processors) and — not surprisingly — horrendous environmental implications.

Many exchanges have currently halted or delayed trades of ETC while this is getting sorted. You can read more about the technical details over at Quartz, as I’m trying to avoid being “that guy” who won’t shut up about crypto:

This was by no means the first wide-scale theft on a cryptocurrency exchange. One year ago, hackers made off with $400 million from one of Japan’s largest cryptocurrency exchanges, which even outdid the infamous Mt. Gox $350 million Bitcoin heist. In 2013, a hack of Dogewallet resulted in a heist of about 30 million Dogecoins (current value: ~$68,000, which is so close to being nice).

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