On August 1, Ethereum Classic developers reported that approximately 3,000 blocks were inserted by a miner who was mining for about 12 hours on Core-Geth. After cryptocurrency miner Bitfly identified the reorg, the team of developers investigated the matter and advised all exchanges to halt deposits and withdrawals immediately until the source of the problem is confirmed.
Initially, the reorganization was thought to be a result of a possible 51% attack on the mainnet, but after thoroughly analyzing the situation, the Ethereum Classic team made it clear this is probably not the case.
According to the official report, the offending miner most likely lost internet access for a certain period of time, which led to continuous offline mining on the old software. For around 12 hours, a total of 3,693 blocks were mined, causing a chain split after they were inserted on the mainnet.
This rendered the network unstable, with Parity/OpenEthereum miners continuing to work on the original chain, while Code-Geth nodes were mining the 3,693 block-inserted chain. Due to more activity allocated to the new chain, Parity miners started following the chain header as per the PoW.
In a reorganization, when two versions of a blockchain compete for validity from nodes on the network, the chain that gets the majority of hash power leaves the competing version behind. In this case, the newly-inserted blocks on the chain tried to replace the most current version with itself.
According to latest information, it is still unclear whether an attacker has profited from the reorganization. As stated in the report, the split “does not appear actively malicious”, and while it may still be a deliberate attack, there are not any recordings of a major double-spend attack.
Since almost all transactions in that time are probably not mined in the order they were intended to, the ETC market seems unaffected by this incident. Ethereum Classic developers suggest that miners continue mining the current chain.