The trending news of the day is the 51% attack on Ethereum Classic (ETC). Yesterday, Coinbase suspended all Ethereum Classic (ETC) transactions. This followed a 51% attack on this crypto that led to the double spend of $500k worth of ETC. While 51% attacks are not new in crypto, a series of them in 2018 and now this one in 2019 doesn’t play well in bringing in the much-needed investments into crypto. With such security concerns, two scenarios are likely to play out long-term. The first one is that investors are likely to hold off from crypto, and stagnate the market. The second one is that investors are likely to seek out the most secure cryptocurrency in the market, as their primary investment.
Scenario one is highly unlikely given that institutional involvement in crypto is on the rise. This means that in spite of all the challenges that this young market is facing, institutional money is very much interested in blockchain technology. And with the growing integration of blockchain into the processes of major corporations all across the world, you can bet that money will continue to flow into this market.
The most probable scenario that heightened security concerns would bring about is to drive up Bitcoin maximalism. That’s because, Bitcoin is the most secure cryptocurrency, and has no equivalent. It is almost impossible to do a double spend attack on Bitcoin (BTC). The only way to do it would be for a state actor to commit itself to ruining it, which would carry with it political ramifications at the global level. Besides, for such much hash power to enter the Bitcoin network, it would be easily noticed by everyone else, further reducing its chances of success.
This security makes Bitcoin (BTC) a safe bet to make major investments without the risk of losing it out of broken trust, coming from such attacks. Given that Bitcoin is the most secure of them all, it is likely to draw in the most investment.
The problem with increased bitcoin maximalism is that it carries the risk of starving the other cryptos of investments, leading to their slow death. Once institutional money takes a big interest in Bitcoin (BTC) through vehicles like Bakkt, the altcoins market could see its value dwindle significantly in the long run. The danger with this is that, cryptos that have good tech, could eventually disappear. There are so many altcoins that are technically great, and could revolutionize the world, but may not survive. As such, if such 51% attacks lead to a loss of confidence in altcoins, it would be a loss for humanity, in terms of tech progress.
Whatever happens, it is going to be an interesting year for crypto, and Ethereum Classic (ETC) in specific. Can it survive this, just like it has survived the death of the ETCDEV? Well, only time will tell. It would be best for the crypto ecosystem that it survives it. From its price action today, chances are that it will survive, and it’s good for crypto.