Best TruStories of the Week - #8


#85

Are you saying that 51% attack will affect both exchanges and users, but could affect exchanges at a larger intensity than individual users? If so, I will challenge original claim with 10 Cred.

As Haseeb said, "If you’re the 51% attacker, you want to rob the bank, not some random person on the street. In crypto, that means exchanges."

This is what Haseeb suggested a 51% attacker would do:

  1. Attackers deposit crypto (e.g. ETC) in exchanges
  2. Sell ETC and convert into USD through exchanges
  3. 51% attack ETC and reorg, revert original sold ETC but already bagging the USD

Because it’s easier operations for attackers to aim at an exchange in order to realize profits, that is why exchanges would be a better target than individual users. If so, individual users can hold exchanges liable for losing their money, which will result in complicated court cases.


#86

ah okay, this clears it up a bit. I still back the original claim based on Manasi’s points: Best TruStories of the Week - #8


#87

@preethi yes, you’re right, there is an assumption that the attacks are on centralized exchanges.

To my knowledge the attacks that happened in 2018 to monacoin, bitcoin gold, zencash and litecoin cash all targeted (centralized) exchanges. Source. As for Verge, I think the target of attacks were mining pools.

It appears attack targets are large centralized entities with large enough funds to make the attacks worthwhile.

Good point about decentralized exchanges, there is no protection for individuals. Although, I would assume decentralized exchanges would be harder to attack, and would less likely be a target.


#88

Hey @manasi - yes, I agree with you. An attack does compromise immutability (and security) of the network, irrespective of price.

Great point about mining empty blocks - and how this would affect individuals as much as exchanges. To my knowledge, the most recent 51% attacks (in 2018) involving monacoin, bitcoin gold, zencash and litecoin cash all involved (centralized) exchanges. For Verge, the target was a mining pool.

I agree on your third point that if exchanges decide to de-list, that will negatively affect the price.

I think the point I’m making is that contrary to popular belief that a coin’s price would drop to zero, the fact that ETC’s price only fell 7% (while Verge went up after an initial attack) is surprising. I had assumed that all 51% attacks would be felt by individuals and they would immediately abandon the coin. What i’m learning is that pattern we saw from last year and now with ETC is that centralized exchanges (and in some cases, mining pools) have been the most popular target of attacks.

However, this could change in the future.


#89

@sijo0703 Thats a good point, I’d agree with this:

When users are relatively unaffected and hence the price doesn’t drop to zero, it may indicate a centralized entity (centralized exchange) are bearing the brunt of the attack.


#90

I don’t think it’s a random theory at all. It could very well be that several individuals where in on it and a large percentage decided not to keep their word and return the money. Interesting point.