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The anonymous cryptocurrency, Grin (GRIN), is currently under a 51% attack. This was confirmed yesterday by Grin’s second mining pool, 2Miners, which issued an alert on Twitter. It is believed that a group of unknown miners now control 57% of the payment network hashrate. A chart from Grinscan data also shows that the share of hashrate controlled by this unknown entity has since increased to 57.4%.
As a reminder, 51% of attacks generally concern blockchain that uses the Proof-of-Work protocol. They can occur when an entity controls more than half the hashrate of the network. The latter can then recognize the chain and the blocks to profit from them or censor transactions on the network. This is why the occurrence of a 51% attack on Grin is problematic for the altcoin.
We already know that the unknown entity reorganized a block on November 7. Although sometimes, an entity can have majority control over an altcoin without ever doing anything with it. For example, the sparkpool mining pool had initially controlled more than 60% of the Grin network hashrate without tampering with the blockchain.
Another real risk for Grin is the reduction of confidence in the security of the Grin network. This could have direct consequences on the price of Grin, which has been bullish in months. Grin exceeded $0.60 in August but has fallen steadily since then to trade at $0.23 at the time of publication. The coin has also dipped by 16% since the announcement of the attack yesterday.
Over the past 12 months, Grin has lost 79% of its value, and its market cap has dropped to $13 million, which places it 324th in the ranking of cryptocurrencies based on market capitalization.
Other major cases of 51% attack
There have been cases within the crypto space of major 51% attacks, with the most popular Ethereum Classic. The ETC network has suffered three 51% attacks in 2020, with the third one resulting in the reorganization of over 7000 blocks.
These attacks resulted in several exchanges suspending transactions of ETC on their platform and some delisting the coin. Grin will have to recover quickly, or there could be steep consequences for the altcoin.