On September 15, The Merge successfully occurred at the Ethereum (ETH) network. This event changed the protocol for mining ETH and marked the birth of a new A digital currency running on a blockchain and built with cryptography. Contrary to central-bank issued currency, cryptocurrency issuance rules are... More called EthereumPow (ETHW). However, 72 hours after the birth of this crypto that intends to continue mining ETH with the old protocol, an ETHW hack occurred.
The Merge was one of the most anticipated events for the Ethereum community and cryptocurrencies in general. However, despite expectations, this event did not positively impact the crypto market, which starts this week lower.
ETHW and the technical problems that led to the hack
As mentioned earlier, ETHW is a cryptocurrency that preserves Ethereum’s Proof of Work (PoW) lets one party proof the execution of an algorithm to another party. In the Bitcoin PoW... More (PoW) mining. But, this cryptocurrency has experienced technical problems since its launch. Therefore, the malicious actors took advantage of the vulnerabilities this September 18 and hacked 200 ETHW, equivalent to about $1,000.
The ETHW hack was not a direct attack on the chain but a replay attack thrown at the Omni Bridge smart contract. The attackers replayed a message from the Ethereum PoS chain on the EthereumPow chain after the bridge failed to verify the actual chainID of the cross-chain message properly.
According to the ETHW Core team, this kind of hack is ‘impossible’ directly on the ETHW chain because has enforced EIP-155. Likewise, the team had previously communicated with Omni Bridge to correct the problem.
Despite this, ETHW went from worth $60.68 to $4.22 in seven days [CoinMarketCap].
What has happened to Ethereum since The Merge?
Aside from the ETHW hack, the outlook has not been favorable for Ethereum either. The price of this cryptocurrency has decreased by 25% in the last seven days and stands at around $1,380 [CoinMarketCap].
Earlier, the activation of The Merge on the Ethereum test networks had been favorable for the price of ETH. Hence, the expectations of investors and the community pointed out that activating this update would boost the value of ETH above $2,000.
Sadly, the arrival of The Merge coincided with inflation reports from the United States. Thus, the unfavorable data from The Consumer Price Index (CPI) caused a general fall in the markets, including cryptocurrencies.
Also, the Chair of the U.S. The Securities and Exchange Commission (SEC) stated that cryptocurrencies powered by PoS could be considered securities. Although the Chair did not refer to any specific one, he reignited the debate on whether ETH is a security or not.
US CPI inflation rose 0.1% in August and 8.3% for the year, further increases in interest rates could apply. Recently, the rise in interest rates has affected the price of nearly all cryptocurrencies. So, we will have to wait and see how the crypto market performs in the coming days.
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