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A 51% attack allows you to rewrite history, which allows you to "double spend". For example, you could send funds to an exchange and withdraw them in cash, then

by xur17 3y ago

A 51% attack allows you to rewrite history, which allows you to "double spend". For example, you could send funds to an exchange and withdraw them in cash, then during the attack send them to yourself instead. The amount of computer power defines how far back you can reorg the chain. The transactions you create still have to follow protocol rules, which means you can only send funds from wallets you have the keys for - you cannot create money out of thin air, or steal funds from someone else's wallet.

oersted 3y ago
You can't "double spend" without anyone noticing, even a minimal amount is in theory detectable by the exchange and the word would spread like fire. Perhaps the exchange would let it go if the amount is small enough, so that the value of the currency doesn't crash for everyone, but remember you are trying to recoup the enormous investment needed to get to 51%. It's true that you can withdraw a large amount of money once, let the whole thing crash and run away with the cash. But you need to control that money to withdraw it, so you'd need to take it from other's accounts using your 51% advantage, and get the cash from the exchange before anyone notices. How are you gonna do that for such a large amount of money? The exchange would never let you withdraw anywhere close to such an amount anyways, they just don't have it. Even if you somehow do it on all exchanges at the same time, it's too much. Even if they somehow have the capital, they just wouldn't let you, because they know it will tank the value of the currency, even if the withdrawal is legitimate. I really can't see how you can steal more than you spent with the 51% move. The only thing you can do is spend a lot of money to crash the currency with a big loss on your side.
- phire 3y ago
  Exchanges almost always have large amounts of stable coin, and no limit on withdrawing them. It makes it so easy to get large amounts of cash equivalents out of an exchange and then launder them though mixers (even laundering it though the deposit wallets of other exchanges would obscure the path long enough for them to covert it to real cash). An attacker can deposit coins, trade it for USDT and have it deposited in another exchange before they even reveal the 51% attack.

by xur17 3y ago

oersted 3y ago

You can't "double spend" without anyone noticing, even a minimal amount is in theory detectable by the exchange and the word would spread like fire. Perhaps the exchange would let it go if the amount is small enough, so that the value of the currency doesn't crash for everyone, but remember you are trying to recoup the enormous investment needed to get to 51%. It's true that you can withdraw a large amount of money once, let the whole thing crash and run away with the cash. But you need to control that money to withdraw it, so you'd need to take it from other's accounts using your 51% advantage, and get the cash from the exchange before anyone notices. How are you gonna do that for such a large amount of money? The exchange would never let you withdraw anywhere close to such an amount anyways, they just don't have it. Even if you somehow do it on all exchanges at the same time, it's too much. Even if they somehow have the capital, they just wouldn't let you, because they know it will tank the value of the currency, even if the withdrawal is legitimate. I really can't see how you can steal more than you spent with the 51% move. The only thing you can do is spend a lot of money to crash the currency with a big loss on your side.

phire 3y ago
Exchanges almost always have large amounts of stable coin, and no limit on withdrawing them. It makes it so easy to get large amounts of cash equivalents out of an exchange and then launder them though mixers (even laundering it though the deposit wallets of other exchanges would obscure the path long enough for them to covert it to real cash). An attacker can deposit coins, trade it for USDT and have it deposited in another exchange before they even reveal the 51% attack.