Ethereum’s PoW hard fork struggles with technical issues and replay attack, tanks 90% since listing

ETHW surged more than 70 percent, going from $35.4 on the morning of September 15 to $60.68 after The Merge. It was a good sign for ETHPoW's future. However, one must also remember that ETHW was valued at almost $139 when it was first listed on CoinMarketCap. Therefore, despite the recent price rally, ETHW was nowhere near its all-time high.

Worse still, after its brief price surge, ETHW began a drastic downward spiral, eventually reaching $5.01 at the time of writing. That's a 36.86 percent drop in the last 24 hours and a 96 percent loss of value since its initial listing.

One of the main reasons for the ETHW nosedive is its chain ID. This number serves as a network's unique identifier and helps blockchains track and control on-chain assets. The developers behind ETHPOW had chosen a chain ID of 10001, which is already being used by the Bitcoin Cash testnet.

As a result, several users began reporting difficulties accessing the network after it went live. "How to access my ETHW? I tried to add this new chain to Metamask, but it doesn't work!" said one individual in a tweet. Other users pointed out that having the same chain ID could also lead to replay attacks.

“MetaMask says: The network with chain ID 10001 may use a different currency symbol (BCHT) than the one you have entered. Please verify before continuing. Get ready for a replay attack LMAO!!! Do you guys even know what you're doing?" said another Twitter user. A replay attack refers to an exploit where scammers replicate transaction call data from on network to another.

These attacks usually occur during hard forks and are made easier if both networks possess the same chain ID.

Sure enough, BlockSec, a blockchain security firm, confirmed an incident where a replay exploit resulted in 200 ETHW tokens being siphoned by an attacker. “On September 16th, 2022, we detected that some attackers successfully harvested lots of ETHW by replaying the message (i.e., the calldata) of the PoS chain on EthereumPoW (aka the PoW chain),” the company wrote in its Medium post. As per its findings, the hacker first transferred 200 WETH through the Omni Bridge. They then replayed the same calldata on the PoW chain, getting an extra 200 ETHW.

The ETHPoW team has also acknowledged the incident but maintains that it was not a network vulnerability but loophole in the Omni bridge. They also said that they contacted the bridge devs “in every way and informed them of the risks," adding that "bridges need to correctly verify the actual ChainID of the cross-chain messages.”

What’s strange here is that there was plenty of talk regarding chain ID in the days leading up to The Merge; many user noticed that ETHPoW was using the same chain ID as the Ethereum mainnet. However, Chandler Guo, one of the miners leading the hard fork initiative, reassured users that the project devs would change the chain ID after The Merge.

"The chain ID for ETHW is 10001, which we will publish on our Twitter account. The code you mentioned in the above comments has to keep because chain ID 1 is needed to validate chain data for blocks before the Merge, and all chain data after the Merge will be chain ID 10001," Guo said in a tweet.

Why 10001 was chosen as the chain ID is unknown. However, after ETHPoW went live, users discovered that it was the chain ID used by the Bitcoin Cash testnet.

Another possible reason behind the crash could be the dearth of miners and the lack of profitability. Currently, ETHPoW has a hashing power of 29.98 tera hashes per second (TH/s). Hashrate reflects the overall performance and strength of miners on a network.

By contrast, Ethereum's hashrate before the Merge was around 867 tera hashes a second (TH/s). Further, Ethereum Classic, an older PoW version of Ethereum, took on 243 TH/s after the Merge. This indicates that miners are looking to get behind other PoW networks, rather than back the ETH PoW hard fork.

One of the reasons for this could be the lack of profitability. ETHW miners' earnings are 90 percent lower as compared to when they were mining Ethereum, according to an article by The Defiant. And as long as ETHW prices continue to drop, this will remain an issue for ETHPoW.

The goal of ETHPoW was to provide financial shelter to miners as The Merge rendered their mining rigs obsolete. However, with falling prices and tech issues coming to the fore, miners seem to be migrating to proven PoW blockchains that are already in existence. Whether the developers behind the renegade blockchain can turn things around, only time can tell.