Ethereum Network Attacks Continue, Driving Up Transaction Fees

Blockchain, News | August 8, 2018 By:

The ethereum network is being clogged by spamming activity that is raising transaction fees (known as gas). The unknown activity began Tuesday and uses a smart contract identified as possibly linked to a copy of a game. The transactions have consumed more than 36.4% of gas.

As a result, fees for regular transactions have risen above $1, causing some services to raise their own prices to pay for the gas.

So far, there’s only speculation as to the purpose. It could be a test for a future attack, or could merely be a disgruntled user clogging the network. It may also be an attempt to make an ether-based game look more active.

Shawn Douglass, co-founder and CEO of Amberdata, a blockchain monitoring and analytics platform, answered a few questions on the problems.

BLOCK TRIBUNE: Was this a hack?  Someone screwing around? Or was it, perhaps, a test of vulnerabilities on the blockchain? 

SHAWN DOUGLASS:  Based upon the data on chain, we can only speculate on the intention of the actor/actors involved. The data supports that someone paid real money to congest the network. Our anomaly detection system caught the activity in real-time, but it took us a little while to see the effects play-out. Why, we don’t know. Ethereum makes it cost prohibitive to do these kinds of activities and as such those involved paid for these transactions. They could have been programmatically executed in error or intentionally orchestrated. 

BLOCK TRIBUNE:What does this mean for the ethereum blockchain going forward?

SHAWN DOUGLASS:All systems have constraints, whether that be our laptop, cloud-based or decentralized. DoS attacks target and exploit those constraints. Ethereum has a novel protection mechanism which makes it cost prohibitive to do a DoS attack. If this was a DoS attack, those mechanisms appear to have made it very expensive in real dollars for these transactions. If accidental the miners benefited from the higher transaction fees either way.

BLOCK TRIBUNE: There is a lot of emerging competition in the marketplace to the Ethereum blockchain – will this give them some momentum?

SHAWN DOUGLASS:  Ethereum has many emerging competitors. Clearly the cost of carrying out a DoS attack for a well funded actor may justify allocating of resources. Ethereum is the leader in terms of value held on-chain assets transferred, trading volume and the size of the community. Ethereum – as is any system on the internet – is continuously under attack. To date the anti-DoS mechanisms have held. Any new entrant will need to be able to hold up against these types as well as other types of attacks. This is why operational telemetry into these systems is critical. We need to be able to trust the trust machines. Amberdata’s mission is to enable transparency and trust across decentralized smart contract platforms.

BLOCK TRIBUNE: Can anything be done to prevent this in the future without stifling scaling?

SHAWN DOUGLASS:  Incentives drive behavior, and we don’t know the why, we only know what happened. This could happen again if someone chooses to spend tens or hundreds of thousands of dollars to execute a DoS attack. Just like if you orchestrated massive resources you could DoS a major institution’s web services. Scaling needs to happen and we hope it happens sooner rather than later, but even at the next level of scale there will be a limit. If someone wants to spend the resources any system can be resource starved. The question for me is who and why?