Ethereum Classic was created as a result of Ethereum hard fork in June 2016. This year, a hack occurred on the Ethereum network, which caused damage of around 50 million dollars. The stolen funds divided the then Ethereum community into two parts. One group wanted the consequences of the hack to be corrected, and the funds returned to the addresses from which they were stolen. This involves canceling transactions on the blockchain. The other group was against remodeling the blockchain, believing that in that way the purpose of the project was lost.
Ethereum Classic is the version of Ethereum that kept the original blockchain with the consequences of the hack, while Ethereum returned the stolen coins.
After hard fork, Ethereum classic always had significantly fewer miners than Ethereum, and thus a smaller network hashrate. This meant that Ethereum Classic was at constant risk of 51% of attacks.
There were several large 51% of attacks that reorganized several thousand blocks. The attacks caused damage that can be measured in millions of dollars, but more importantly, these attacks shook the trust of the rest of the community that was gathered around the project.
ETC is not surrendered. The developers behind this project have prepared a solution to the problems faced by their community, and it is expected that this solution will ensure the security of the network and increase the number of miners on it.
To better understand how the new upgrade works, we must first understand what a 51% attack is and how it happens.
A good portion of miners use services that sell their hashrate to customers who offer the most. As compensation, miners are most often paid in BTC. In this way, the profitability of mining increases, and miners have less risk because they are paid in BTC.
The service takes a percentage, and users do not have to buy and set up digging machines, but only "point" the purchased hashrate to the desired network and dig the coin they need. It sounds like a win-win situation, until the potential downside of this approach is taken into account.
51% of attacks occur when the longest blockchain is created via the offline mining pool, which contains malicious information with the help of a purchased hashrate. Meanwhile, the attacker executes transactions via a real blockchain. It usually happens that the attacker pulls a large amount of that coin on the exchange office, exchanges it for BTC, ETH or some other coin.
After withdrawing his new coin from the exchange office, the attacker spreads his fake blockchain to the rest of the network via a node. Then there is a reorganization, ie reorganization of the blocks. The transaction to the exchange office did not take place on this fake blockchain. The network accepts this fake chain because it is longer than the original because the attacker managed to collect more than 51% of the network hashrate. Instead of real blocks, fake ones are set up by the offline pool.
After the reorg is complete, the attacker gets the coins back on his wallet (because according to the fake blockchain, the transaction didn't even happen). So he effectively spent his coins twice. This is just one of the things an attacker can do when he has more than 51% hashrate.
Therefore, the ETC team decided on another important change, and that is the change of the DAG file used for mining. In one of the previous blogs, we mentioned that mining ETH will soon not be possible with all graphics cards that have less than 4GB of memory. The current DAG file size for ETH is 3.96 GB and for ETC is 4.05 GB.
Zotac P106 3GB Mining Card
Modifying the DAG file will result in a reduction from 4.05 to about 2.5GB. This means that it will again be possible to mine with cards that have only 3 or more gigabytes of working memory. Some of the cards with 3GB of RAM are more than half a decade old, which is a lot in the world of technology. To mine ETC you will not have to make any changes to your current rig. It will be enough to update the mining software to the latest version.
If you do not have a rig, and you want to mine ETC, you will have a wide selection of cards that you will be able to use. There is also a whole series of mining-only cards that will be able to be used again due to the reduction of the DAG file.