Ethereum collapses by 10% due to the reorganization of 7 blocks

Ethereum collapses 10% due to 7 block reorganization - ethereum down 1What is a blockchain reorganization and why is it important?

What happened

In view of the imminent "merger" that will combine the Beacon chain of Ethereum (quotation ETH) with its existing network, scheduled for August, investors face another headwind. To date, Ethereum is the worst performer among the 10 cryptocurrencies by market capitalization, with a decline of 10% in the last 24 hours.

This movement was brought about by a reorganization of seven blocks. Ethereum's Beacon chain has effectively forked, causing investors to fear that this is the result of an attacker, a network failure, or a bug.

Leading Ethereum developers tweeted to theorize that this reorganization was the result of some miners using outdated versions of the mining software. However, this reorganization has hinted to many that the previous August timeline for the Ethereum merger may be delayed, once again.

What happen

A reorganization occurs when miners attempt to add transaction blocks simultaneously on the blockchain. This can duplicate the blockchain, creating a fork that can lead to the loss or duplication of transaction blocks. For any blockchain, this is a serious event.

However, the number of transaction blocks that are ultimately lost is a determining factor in the severity of a fork. In this case, seven blocks of transactions (each with approximately 200-300 individual transactions) were eliminated, equivalent to approximately 14 ETH (or approximately $ 26.000) of duplicate transactions. Bad guys who try to duplicate activities, also called "double spend" attacks, can do so by forcing a fork in the chain.

While this appears not to have been the case, a reorganization of seven blocks is out of the ordinary. Typically, due to network latency, one or two block reorganizations can occur. However, longer rearrangements are possible if the stars align improperly.

And now?

Putting aside the idea that the Ethereum network has been severely compromised, which many are having a hard time doing right now, it is clear that the Beacon Chain may need further work before the final merger. If these kinds of issues are not resolved early, investors may fear that the rush of this massive update could put the integrity of the network at risk. Investors today seem concerned that this seven-block reorganization may be emblematic of other problems below the surface.

Maybe it's just bad luck. It could be. However, in this bear market, it is clear that investors are not necessarily willing to buy the downside as they have in the past on these issues. As a result, Ethereum is sure to be an interesting token to keep an eye on.