Augur (REP), a decentralized peer-to-peer platform enabling its users to make any real-life predictions, has introduced a new bet on Ethereum Classic (ETC).
On Jan 8, the oracle platform offered a bet on ETC getting delisted from Coinbase, one of the world’s most popular crypto exchanges. Such betting might only add fuel to the fire for the already depressed cryptocurrency.
Ethereum Classic, which is currently the 18th largest cryptocurrency by market cap, made its way to Coinbase at the beginning of Aug 2018. Just five months later, users of the Augur platform are making wagers on whether Coinbase will delist the ETC trading pairs on the consumer exchange before Jan 1, 2020 — at which time it will expire. At the time of writing, there was only 0.7600 ETH staked on the bet, while the outcome of delisting was estimated at 76 percent.
The crypto community believes this attitude is related to the most recent ETC woes, including a recent 51 percent attack on its network and the key shutdown of the ETC development team.
At the beginning of December ETCDEV, the leading development company for the Ethereum Classic Network announced it was to cease its activities due to the lack of necessary funding. Before its closure, it desperately tried to raise financing from the public but was unable to meet its goal.
ETCDEV was the best-known team among the other ETC network developers, as well as being the only team focused solely on building and maintaining projects on Ethereum Classic. Thus the ETCDEV shutdown proved to be a devastating blow to the whole ecosystem as a whole.
At the beginning of this week, Ethereum Classic suffered again when it fell victim to a 51 percent attack on the ETC blockchain. Interestingly, ETC developers first tried to deny the fact.
In an initial tweet deleted shortly afterward, they explained that the hash rate had come from testing new 1,400/Mh Ethash machines by ASIC manufacturer Linzhi. They also insisted it was selfish mining, while no double spends had been identified.
However, several crypto exchanges didn’t agree with this. Notably, it was Coinbase that first announced the attack on its blog. The company detected a ‘deep chain reorganization’ of the ETC blockchain, including double spends, as early as Jan 5. In response, Coinbase immediately paused all interactions with the ETC blockchain.
Two more exchanges, Coincheck and BitFlyer, followed suit and also disabled ETC trading to protect users’ funds. According to the update of January 7, Coinbase detected repeated deep reorganizations on the network, with multiple double spend cases totaling 219,500 ETC (~$1.1M).
Currently, it still remains unclear who gained control of the majority mining power on the ETC network. However, the latest development once again raised the issue of the security of the PoW algorithm.
ETC as a cryptocurrency emerged as a result of the Ethereum hard fork in 2016. One of its distinguishing features at that time was its developers’ reluctance to switch over to a proof-of-stake (PoS) consensus protocol. Instead, they insisted on a PoW algorithm requiring a network of ‘honest’ miners to process transactions.
In light of this, some members of the crypto community emphasize the inherent vulnerability of this methodology to the threat of 51 percent attacks – which is not the case with the PoS algorithm.
Indeed, there is always a chance some that some bad characters take control of more than 50 percent of the network’s hashrate to manipulate it. Accordingly, there’s always a threat to cryptocurrencies based on a PoW protocol, including ETC.
Coinbase’s active involvement in notifying the community about the attack on ETC has become a wake-up call for many. Now, some people suppose that the anxious exchange will try to maintain its reputation by withdrawing its support for the vulnerable cryptocurrency.
Amid such sentiments, the bet on Augur might only turn up the heat. No matter how small it is now, it could prove to be a sort of self-fulfilling prophecy. Emin Gün Sirer, a professor at Cornell University and a famous computer scientist, in his Twitter account has already called the bet “an assassination market for ETC.”
After all, such is the nature of the gambling and prediction markets. The less likely a future event is, the bigger the reward you can earn for predicting the outcome, and it will surely be a bitter irony if an Ethereum-based platform takes a heavy toll on Ethereum Classic.
Do you believe Coinbase will delist ETC by the end of 2019? Let us know your thoughts in the comments below!