ELECTRONEUM

DESCRIPTION OF EVENTS

Electroneum describes itself as a "cryptocurrency with huge, genuine usage via our real-world ecosystem. Earn and spend in over 190 countries." "Using the power of blockchain to unlock the global digital economy for millions of people in the developing world. Helping everyone to live life on their own terms, this solution is enabling people to embrace their entrepreneurial spirit and find new ways to enhance their lives."

"Richard Ells, Founder and CEO, started his interest in cryptocurrency back in 2015 and was building GPU mining rigs (‘ugly brutes’ as he refers to them) by 2016. Even back then, when Bitcoin was worth just a mere $500, Richard knew blockchain technology would change the world for the better. When friends and family would visit, they couldn’t understand the complexity of cryptocurrency. Richard wanted to make it easier for people to use so they too could benefit from the transformational nature of blockchain technology."

"In August 2015, the basis of what has now become the ETN-Network ecosystem started to develop. Richard sought the technical abilities of his team at Retortal Ltd, one of Richard’s other companies, to develop a cryptocurrency. Whilst the design of that initial cryptocurrency was very different to what is seen today, it forged a path that enabled Richard and the team to structure the cryptocurrency to specific use cases."

"Throughout the rest of 2015 and 2016, Richard and the team continued to build upon the project. In 2017, Richard put forward the initial investment required to launch the cryptocurrency, forming Electroneum Ltd in July 2017."

"In September 2017, Electroneum Ltd made ETN exchange tokens available for sale in the Initial Coin Offering (ICO), also known as a token sale. The ETN token sale was a great success closing early after having achieved the maximum Bitcoin and Ethereum targets. The Electroneum Ltd ICO is still the record holder for the largest ICO ever to take place by participant numbers (115K+). The value of the Bitcoin and Ethereum that was used to purchase ETN was $40 million USD at the time the sale closed."

"In 2018 the ETN-Network we voluntarily and pro-actively introduced robust KYC and AML compliance procedures ahead of the European 5th Anti-Money Laundering Directive. Ensuring new users are on-boarded in accordance with global compliance for everyone’s protection. Operating within international guidelines set out by global bodies including the The Financial Action Task Force (FATF) the global money laundering and terrorist financing watchdog. To ensure that we operate lawfully in all relevant ETN-Network jurisdictions."

"It seems that trouble is brewing for Electroneum and Verge. Reports emerged on Reddit [on April 1st] that both networks may have recently been under 51 percent attacks."

"Electroneum is probably under a 51% attack right now. Someone may be trying to double spend. Avoid making transactions."

"In Electroneum’s case, there was some speculation from the crypto community as to who might be behind the attack. “It’s possible that this attack is being conducted by Bitmain, who appears to control a large proportion of network hashrate right now,” wrote Reddit user KnifeofPi2."

"Some users speculated that if a 51 percent attack was indeed underway, a hard fork may be the only way out of it. However, Electroneum’s alleged scheduled hard fork in the near future would theoretically end the attack."

"This problem is out of hand, I haven't been able to transfer ETN for days. The mempool is now up to almost 5000 tx. Almost 2/3s of txs sometimes are for fractional amounts. Either those are attack transactions or I suspect some are also mining payouts from crappy pools."

"Reddit user taxiboy1989 wrote that “I doubt that Bitmain or whoever is behind this attack has the current resources to carry out a 51% attack. Because if they did, they would have done it a long time ago. If it is an actual 51% attack, they could attempt it anyway as a last-ditch effort since ETN has a scheduled hard fork coming ‘soon.'”"

"Electroneum suffered a 51 percent attack which was discovered when it was noticed that a massive amount of empty blocks were being constantly mined on the currency’s blockchain one after another, preceded by a sudden drop in hashrate."

"Tech update (51% Attack, ASICS & more) There is no hard evidence that there IS a 51% attack taking place. The evidence that is being used is not evidence of a 51% attack in this instance, it’s a timestamp bug that is causing no problems at all. ASICS are nothing to worry about – we have ASIC resistance in the next update – which will be before the ASIC chips are widely available. Blockchain flooding, we are working on this from two ends – a blockchain update AND our patent makes the blockchain flooding far less problematic."

"There are rumours that a 51% attack on ETN is happening. People have been quoting altered timestamps as evidence of this, but that is a bug that we are aware of and has been there since the first day we launched. It will be fixed but is nothing to worry about. Orphaned blocks have no fundamentally negative effect on the functionality of the blockchain."

"Blockchain flooding. It’s true that someone is spending their own money to flood the ETN blockchain with transactions. Whilst a lot is being made of it by the same people, It’s actually been quite useful to us, as we need to understand the load requirements for true mass adoption. We have some great data from is and are working on a tweak to the blockchain code that will enable us to do something about this, including a change to the dynamic block sizing algorithm (more on this in another update) – but remember that our instant payment system that is coming and is protected in our patent (see below), makes a blockchain flooding attack completely harmless against ETN. Our systems can verify the payment and if it takes hours to hit the blockchain, the user and vendor are unconcerned (read about this in the patent section below)."

"In the fight against fraud, the ETN-Network became the world's first cryptocurrency project to voluntarily adopt AML/KYC measures, and the first to launch a Moderated Blockchain that makes it insusceptible to 51% attack – the largest threat to cryptocurrencies."

"Don’t worry about the future of Electroneum, we are building strong foundations to ensure we deliver what we’ve always promised. Cryptocurrency mass adoption. It’s coming…"

Reports conflict on the full extent of what happened to the Elecroneum blockchain in early April of 2018, however it does not appear that any funds were lost in what was widely reported as a 51% attack. The development team at Electroneum reported that the attack was only "timestamp modification" and transaction spam.

HOW COULD THIS HAVE BEEN PREVENTED?

The solution to mitigate 51% attacks is to increase block confirmation times and institute checkpoints, where all miners agree that transactions up to that point are valid. If a large reorganization occurs, it will be rejected by miners, and the attacker will simply lose the funds spent on the attack.

Check Our Framework For Safe Secure Exchange Platforms

51 Percent Attacks Appear to Have Hit Verge and Electroneum | Finance Magnates (Oct 10)
Electroneum offers a new way to earn, send and pay (Oct 13)
Our Company - Electroneum (Dec 5)
Electroneum is probably under a 51% attack right now. Someone may be trying to double spend. Avoid making transactions. : Electroneum (Dec 5)
An update from Richard : Electroneum (Dec 5)
Pushshift Reddit Search (Dec 5)
Proof-of-Work tech under fire after 51% attacks on Electroneum and Verge (Dec 5)
Imgur: The magic of the Internet (Dec 5)

More case studies

Mesquite Bitcoin
ATM Theft

CoinSecure
Exchange Hack