The world of cryptocurrency is full of surprises. Some of these surprises work out quite well, whereas others seemingly make no sense. After getting hacked in 2017, the CoinDash ICO team has received a second “reimbursement” from their attacker without further explanation.
The CoinDash ICO Saga Continues
When CoinDash conducted its ICO last year, a lot of people were excited about what this team could bring to the table. Unfortunately, all of the positive attention also led to increased scrutiny by cybercriminals trying to disrupt this initial coin offering. At one point, a lot of money was stolen from investors, as the deposit address on the official website was compromised. A fair amount of funds were sent to the wrong address, which is still in control of a lot of funds.
However, it seems the assailant has run into some trouble cashing out the stolen funds. While controlling over 46,000 Ether represents a big paycheck for any hacker, converting that amount of crypto to fiat currency without raising suspicions is pretty much impossible. So far, only one transaction has been made to an address that is not the original CoinDash ICO address. That transaction took place almost six months ago.
Since that time, there has been some remorse on behalf of the culprit. 160 days ago, this hacker sent a transaction worth 10,000 Ether to the CoinDash team. It remains unclear if this was some sort of an apology or merely an attempt to taunt the team for their own screw-up. Regardless of the real story behind this transaction, it seems the assailant is not planning to cash out any of the stolen funds as of right now. Nor would he or she be able to, as this address has been flagged on the Ethereum blockchain.
Even so, the CoinDash ICO story is far from over. Three days ago, the hacker sent another batch of stolen funds back to the project’s team, for no apparent reason. This time, a total of 20,000 Ether was returned to its rightful owners, even though it remains unclear what the reason behind this second transaction was. It doesn’t make much sense for a hacker to return stolen funds without explanation, but in the cryptocurrency world, such things do tend to happen now and then.
Even though this change of heart raises a lot of questions, it is a positive development, all things considered. None of the actions taken by the hacker will prevent the CoinDash team from realizing their vision or rolling out their product this week. The new transaction has been reported to the Counter Cyber Terrorist Unit in Israel, and the hacker’s address will be monitored further. It is a very intriguing turn of events, although no one can make any sense of it.
Whether or not the hacker will send back the remaining funds remains to be seen. As of right now, the flagged account still holds over 13,000 Ether. At today’s prices, that represents a sum of nearly US$11 million in funds still in limbo. It is quite interesting how the “fake” address has also received a lot of airdrops from various ICOs and accrued a balance of US$81.21 as a result. It remains unclear what will happen to those funds moving forward.
Ethereum Classic – A Sleeping Giant
Ethereum Classic provides the same functionality, it is very easy to switch from ETH to ETC if such an overload happens. This would lead to a huge transfer of capital from Ethereum to Ethereum Classic. Here we can take a look at Bitcoin Cash (BCH) as an analogous example. Since Bitcoin failed to implement the SegWit2x hard fork, hundreds of thousands of unconfirmed transactions started to accumulate in the network and transaction fees jumped to tens of dollars. This made Bitcoin Cash with 8MB blocks to be seen as a viable alternative with the same functionality, but much faster and with lower fees. As a result, its price peaked in November 2017 to more than 0.4 BTC in the BTC/BCH market. At the time of writing, the BCH price is around 0.16 BTC.
Although the analogy between ETC and BCH is clear, Ethereum Classic seems to be somehow forgotten and the exchange rate on the ETC / ETH market is as low as 0.032 ETH / ETC at the time of writing. Compared to BCH vs. BTC, the ratio is about 5 times lower.
Predicting something in the crypto world is always uncertain. But if Ethereum starts having problems with the transaction capacity, which is quite likely to happen in the following weeks, there are high odds that Ethereum Classic will gain big profits out of ETH problems.
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The Future of Ethereum Classic
first look, ETC’s situation does not seem to be very promising. However, further analysis might bring us to an opposite conclusion. First of all, let’s take a look at Ethereum (ETH), which is starting to have difficulties to process the ever-growing number of transactions. An interesting occurrence came after the game CryptoKitties, which runs on the Ethereum network and allows users to trade their kitties for Ether, became popular. A recent article on the BBC stated:
“According to ETH Gas Station, the CryptoKitties game accounts for over 10% of network traffic on Ethereum. As traffic increases, transactions become more expensive to execute quickly. “The real big issue is other major players looking for alternatives to Ethereum and moving to different systems.” Mr. Hileman says”
Since there are many similar games in development, we can expect Ethereum to get flooded with transactions soon, not even counting the increasing number of business users. This being said, the search for reasonable alternatives seems inevitable. What is the alternative going to be? Well, you probably guessed. Ethereum Classic has near enough the same functionality as Ethereum, so it is obviously the first candidate. If businesses and users start leaving Ethereum for Ethereum Classic, an according part of their funds will go with them. And since ETC now reaches only 3% of the value of ETH, even if only 10% of the funds are transferred, it will be a huge boost for ETC.
Another good sign can be seen from the ETC/BTC price chart, from which it is clear that the bearish trend lost its power and the price saturated at the current level of about 0.002 BTC, where it probably found its bottom. This is also relatively close to the all-time low of about 0.001 BTC, so it is reaching a very strong support level as very few people are willing to sell this low. Will we see a reversal of the trend?
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Top 4 Reasons Why Ethereum May Ultimately Fail
1- NOT AN IMMUTABLE BLOCKCHAIN
The main selling point of Ethereum is how it provides blockchain technology and new features to the entire world. One of the primary aspects of using a blockchain is that this ledger creates an undisputed record of events which can no longer be altered once the information has been accepted and confirmed by the rest of the network. That is no longer the case for Ethereum, and it is surprising how few people recognize this important detail.
2- NO SUPPLY CAP
Contrary to what some people may assume, there is no official hard cap on the amount of ETH. While proof-of-work will be replaced by proof-of-stake in the future, Ethereum will continue to be inflationary as a result. Unlike Bitcoin, with its 21 million hard cap, Ethereum has no fixed maximum supply. This means the value of every individual ETH lowers every time a new coin is brought into circulation. In this regard, Ethereum is quite similar to fiat currencies, even though its level of inflation is significantly lower.
3-EXPLOITS AND WEAKNESSES
Even though many companies have joined the Ethereum Enterprise Alliance, they are not necessarily aware of the issues this network has. We have seen two major exploits discovered and used, both of which resulted in massive amounts of funds being stolen. The first exploit was the DAO smart contract bug, and the second exploit showed how Ethereum has no secure multisignature wallet solution currently. Immature technology often suffers from issues like these.
4-CRYPTOCURRENCY ICOS ARE A RISK
Even though virtually every company or project looking to raise money wishes to conduct an Ethereum-based ICO, these crowdsales can have negative repercussions. A lot of these projects will eventually liquidate the amount of ETH raised and dump it all on the market. Not only will this affect the Ether price negatively, but it also shows Ethereum is merely a facilitator to raise funds, rather than technology in which these companies believe.
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