The Emerging Narrative
The altcoin market in early June 2018 is a study in extremes. On one end, EOS has just completed its mainnet launch following a record-shattering $4 billion ICO that accumulated 7.12 million ETH over a year-long token sale. Block.one released EOSIO version 1.0 to the public, and the network officially went live with 21 block producers elected by token holders. On the other end, a cascade of 51% attacks against smaller proof-of-work altcoins has exposed the fragility of networks without sufficient security budgets.
The juxtaposition couldn’t be more dramatic. EOS, trading at $14.04 with a market capitalization of $12.58 billion, sits comfortably as the fifth-largest cryptocurrency on CoinMarketCap as of June 8, 2018. Meanwhile, networks like monacoin, bitcoin gold, zencash, verge, and litecoin cash are being picked off one by one by attackers exploiting insufficient hash power to execute double-spend attacks against exchanges.
Catalyst Identification
The divergence is driven by fundamentally different security philosophies. EOS adopted a delegated proof-of-stake consensus mechanism where 21 block producers are elected by token holders, eliminating the hash power arms race that smaller proof-of-work chains depend on for security. The trade-off is centralization — critics were quick to point out that 21 elected producers could theoretically collude — but the model is immune to the specific 51% attack vector devastating PoW alternatives.
Block.one’s $4 billion war chest, raised through the year-long token sale conducted entirely in ETH, provides another layer of insulation. The sheer scale of EOS’s fundraising meant the project could invest heavily in security audits, bug bounties, and infrastructure. The ICO itself became a narrative point: at 7.12 million ETH raised, it represented one of the largest transfers of wealth in crypto history, concentrated in a single entity.
Meanwhile, NYU researcher Joseph Bonneau’s 2017 analysis on the declining cost of 51% attacks proved prophetic. His research showed that renting hash power through marketplace services could make attacks economically viable on networks that the community previously considered safe. The spate of attacks in May and June 2018 validated his warnings with painful precision.
Key Players to Watch
The broader altcoin market tells the story through CoinMarketCap rankings. Ethereum holds firm at number two with a $60.08 billion market cap and a price of $601. XRP sits third at $0.67 with a $26.5 billion valuation. Bitcoin Cash, fourth at $1,118, carries a $19.2 billion market cap. These top-tier assets have hash power and network effects that make 51% attacks impractical.
But beneath the top 10, vulnerability increases sharply. Litecoin, at number six with a $6.8 billion market cap and $120 price point, remains relatively safe. Cardano ($5.3 billion), IOTA ($4.75 billion), and TRON ($3.79 billion) also maintain buffers. The danger zone starts further down the rankings, where networks with market caps under $500 million simply cannot muster enough mining interest to defend against determined attackers with access to rental hash power.
Verge’s situation is particularly instructive. After suffering one attack that exploited insecure protocol rules, the network was hit again — this time through its lower protocol layer. The repeated targeting suggests that once a network demonstrates vulnerability, it becomes a magnet for additional attacks, creating a death spiral of declining confidence and further security degradation.
Risk Assessment
The fundamental risk calculus for altcoin investors shifted dramatically in June 2018. Proof-of-work security is not a binary state — it exists on a spectrum determined by how much economic resources stand between an attacker and network control. For Bitcoin and Ethereum, that barrier is enormous. For a network like zencash, which lost over $500,000 across three attacks, the barrier proved woefully inadequate.
EOS’s delegated proof-of-stake model introduces different risks. The concentration of block production among 21 entities creates potential for governance capture, and the week-one drama around block producer elections and constitution disputes hinted at challenges ahead. But the model does eliminate the specific hash power rental attack vector that has devastated smaller PoW chains.
The exchange response adds another layer of risk. As exchanges increase confirmation requirements for vulnerable chains — or delist them entirely — liquidity dries up, prices fall, and the economic incentive for miners to secure those networks diminishes further. This creates a self-reinforcing downward spiral that can be fatal for smaller projects.
Strategic Conclusion
June 2018 marks a turning point where the altcoin market begins sorting itself into viable and non-viable projects based on fundamental security rather than marketing narratives. The lesson is harsh but necessary: consensus mechanism design and security budget are not academic concerns — they directly determine whether a network survives.
For market participants, the practical takeaway is straightforward. When evaluating altcoin investments, security infrastructure deserves as much weight as technology roadmap or team credentials. The networks thriving in this environment — EOS with its delegated PoS, Ethereum with its massive hash power, the larger PoW chains with billion-dollar market caps — share one common trait: the cost of attacking them exceeds the potential reward.
The projects that will define the next phase of cryptocurrency evolution are those that recognize security as a first-class requirement, not an afterthought. The altcoin graveyard is growing, and the tombstones all tell the same story: insufficient hash power, inadequate security budgets, and a community that assumed theoretical threats would remain theoretical forever.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk, including the potential for total loss. Always conduct your own research before making investment decisions.
$4 billion ICO and 21 block producers. that is a corporate board with extra steps
meanwhile the small PoW chains getting 51% attacked had more actual decentralization than EOS with 21 BPs. irony
EOS at $14 with a $12.5B market cap. one year later it was under $4. the mainnet launch was the local top for so many bagholders