Topic: Is the attack "51%" legal? (Read 310 times)

To me I see 51% attack as a fraudulent activity in blockchain, and hence it can be categorized as illegally. It think because the regulations on crypto are still evolving, they might get regulations for that as well.

Maybe I went overboard saying that Vitalik Buterin is a single point of failure, but I claim that if Vitalik Buterin said that "code is law", would have avoided rolling back the blockchain to recover DAO funds and said that the legacy chain is the real ETH, the balance would have lean towards that and we would see the opposite of what we see today: ETH being the legacy chain with the ETH token, majority of hashrate and support and the DAO fork renamed into god knows what and supported by some minority. That is how much weight I give Vitalik in the project. He is capable of tilting the balance when there is indecision in whatever side he supports, and this is an huge liability for a so called decentralized project.

Then there's this:





Good luck with that.

I recognize that Vitalik and the Ethereum Foundation have significant influence over consensus forks, but that doesn't equate to a "single point of failure." I also recognize that ETH pool mining is highly centralized, but given the state of Bitmain and its proxies, I'm not sure I can agree regarding mining centralization in Bitcoin.

In any case, the Ethereum protocol is properly described as decentralized. It's just a description of how validation works in the protocol. I have no interest in engaging in a pissing contest between BTC and ETH with regard to "degree of centralization." I don't care about that.


As a starting point, we should assume that consensus never exists beyond the protocol one has opted into (by running a node).

Actual consensus to incompatibly fork is logically impossible; that requires 100% of users to not only upgrade, but to agree absent coercion. That's why I oppose any miner-backed hard fork "upgrades" in Bitcoin: if backed by hashpower, they are coercive and therefore unethical.

As such, I'm not of the belief that a "successful" hard fork requires 100% of users to upgrade. There's nothing wrong with communities splitting, and that's exactly what should happen sometimes. The fact that some level of hash power and user base remained on the Classic chain casts doubt on your idea that Vitalik Buterin is the ultimate arbiter as well.


Okay. I guess Ethereum really gets your goat, huh?

Anyway, I don't have a dog in this race. I have no reason to have strong opinions or argue about this crap. If Ethereum only exists as an example of what not to do with Bitcoin, then perhaps it even provides some value to Bitcoin development...

That's outrageously more than ample and all other coins would dream of having such things available to them. For most it's all about the dollars and nothing but. ETH has been a better goldmine than any actual goldmine could possibly dream of.

Code is law is very cute. The real law is not going to agree.

Ethereum has a big single point of failure called Vitalik Buterin. It's also not even decentralized. The mining is even worse than Bitcoin, and the nodes is definitely WORSE than Bitcoin at such insane level of growth rate.





There was never an alignment to fork. The fact that Ethereum Classic was created and still exists shows that it was a failed hardfork. A successful fork doesn't generate an altcoin, if there is consensus the legacy chain dies.

Vitalik and friends lost a lot of money and they recovered it via hardfork. Ethereum is a joke. No "code is law", not a safe store of value, doesn't even scale to be an usable token for common payments. I still don't see why ETH is worth what it is other than it's ability to generate ICO's and Vitalik having big connections like Putin, certain banking groups etc, to keep it in the news.

I am actually very interested in this question. A 51% attack *should* be illegal. Although I think actual laws addressing 51% attacks specifically are a long long ways off. In a lot of ways governments have an incentive to never make laws that would improve the stability of bitcoin or crypto coins. If there were laws, especially international laws that made 51% attacks illegal the price of cryptos would be much less volatile. Although the laws would not prevent attacks completely, it would signal to the average person that the crypto world is a controlled and monitored market. Government may never accept crypto and protect its very specific needs.

It's a really interesting question and I think that's the only likely answer.

There's no one to adjudicate or guarantee anything. You're not offered anything to agree to when you sign up. You're one of millions of hands on the tiller and a bigger one can come along and send it off in another direction.

Presumably somewhere some legal minds have been tasked with creating some sort of report on this for deep pockets. I also presume their conclusion was 'tough shit'.

If it's decentralized, there can be no enforceable terms. So, the only thing we have is the code itself. I don't see how the DAO hack could be illegal on that basis according to most common law systems.


I'm on your side regarding the ethics of bailouts. However, I think it's really interesting that such bailouts require a hard fork and therefore a high level of community support. If such a hard fork succeeds, that suggests to me: 1) incentives were aligned to fork, 2) users were coerced by miners backing the fork, or 3) some combination. The ethics of any hard fork (aside from one where 100% of users are incentivized to fork, such as to address an existential protocol failure) are complex. Any given user may disagree, but they may feel forced economically to follow the herd.

Governments most likely don't care as long as you aren't dealing with fiat.

For instance, was the "DAO hack" legal? It was just the code itself, exploited, but if "code is law" applies then it was not a crime from a strict crypto perspective. What if the government made a law saying exploiting smart contracts was a crime while "code is law" is supposed to be the case?

What's clear is these funds were bailed out and for me when that happened the whole dream of "smart contracts" collapsed, it's really nonsense. You either get hardforks to recover money (so code is not law) or you get in legal trouble because of governments making laws about outcome of smart contracts.

Only the protocol itself can ultimately protect your tokens and Bitcoin seems to be the only safe place to hold said tokens, adding complex smart contracts will only increase risk.

We are experiencing how laws are changing rapidly to catch up with all crypto developments. I wouldn't be surprised if ever we reach a point where even minor hints of fraudulent activity can be dealt with legally.

Good thing however is that there never will be a global law where everyone is subject to the same set of laws. Different countries means different laws, and that is the best possible advantage that we enjoy.

It will probably take years before we have some clarity on how everything is going to be. Governments first need to properly understand what mining is and how everything around it works.  

I think that's a really fascinating area, legally. Miners are expected to act honestly because they are incentivized to -- attacks have costs and honest mining is profitable. But does a tort actually occur if, say, they use chain reorgs to allow double spending? After all, I don't think there's any law that would require miners to accept any and all transactions. Ethics aside, why can't they legally publish a new branch that drops certain confirmed transactions from the best chain (and therefore allows double spending by those they are colluding with)?

You do not have to double-spend or carry out a 51% attack on Bitcoin to undermine the confidence people place in it. If you have the capability to do so, threats will probably have the same impact. I doubt if that can be labelled illegal under existing laws.

I don't think even double spending is fraud. I mean it is obviously fraudulent activity, but im not sure if any government at all has made laws regarding the double spend case since crypto is such a new phenomena.

I think there is nothing illegal per se, the only law is the protocol itself. It wouldn't hurt if governments made it clear for miners that if they attempted a %51 attack they would go to jail tho, but the protection against %51 attack should come from incentives not to do so within the crypto system itself and not depending on the protection of a government. So far Bitcoin is the only coin that has that, the rest of coins are fucked.

I think that the main focus in this situation should be done on the technical aspect. The legal side is clear. It's illegal because the ultimate purpose of this action is to take someone else's property. It seems to me that 51% attack can become a global problem for all coins that use GPU mining.

Let us not focus on the technical aspect or how 51% attack is done. The attack is like double-spending and what have other have called this attack it is equivalent to a digital counterfeit. And we all know a counterfeit currency is illegal in any country for some it is even considered as a national threat. Double-spending itself is fraudalent by nature meaning it is punishable by penal laws. They are basically taking advantage of someone just for their gain.

Any attack to seize funds is illegal. But I'm more interested in who this attack could organize. Who has the concentration of power in the same hands? It seems to me that the manufacturers of asics are involved in these attacks. So they punish the networks for trying to protect against asics.

In most cases,activities that are considered as illegal are immoral as well,but some activities might legal,yet immoral.I think that a 51% attack is the same as corporate piracy.Corporate piracy is the action of buying 51% of stocks from some company that doesn`t want to be bought by you.Such activity is legal(it doesn`t break the law),but it`s immoral,because it might damage other people,who hold stocks in that company,if you decide to bankrupt the company.

In addition to the previous quotes, I should say that the 51% is not only illegal (if used by illegal activities), but immoral. It makes the credit towards the crypto world to decay. If the power of the transactions fall into a person or a colluded group of persons, then, where is the decentralization?
From my perspective, this is just another example of a scam, and break all the bases of the crypto, even if it is not used for "illegal" activities, the mere existence of the will of having the 51% of the power just shows how the crypto can be manipulated and breaks the credibility on the system.

Exactly. There are no laws that limit an individual's (or a collaboration of individuals) hashpower relative to everyone else's. A single company could take control of 90% of Bitcoin's hashpower and there would be nothing intrinsically wrong with that. It only becomes illegal once the people in power use that power, well, illegally. Double spending is fraud, so that's definitely illegal. Other things though, like rejecting transactions may not be, depending on how they're construed.

I don't even think there will be any laws ever that would prevent anyone from grabbing 51% control of any crypto, because the way they work already kind of discourages it. If anyone started to hold like 45% of Bitcoin's hashpower, for example, people are going to drop it and it's going to lose its value, making an attack counterproductive (and that in itself is the consequence you're asking about). These only usually happen to small coins which can be 51% attacked with minimal resources.

In all cases, whether or not someone is double spending or doing some other shady activity, performing a 51% 'attack' on whatever coin is gaining an economical advantage over the rest in each and every way. This form of abuse is illegal by law because it will very likely result in a situation where losses occur on a global scale within that specific ecosystem.

Every pool without malicious intent will never allow its hash rate dominance to come even close to 50% of the total. In case pools grow too large, they will simply try to lower their dominance themselves, or ask miners to point their hash power to other pools, which is the only right way to follow. There is no other way to stimulate a healthy and less centralized mining environment.

Doing a 51% attack may not in itself be illega, but double spending is fraud and that is illegal.

Not a lawyer. A similar question was asked on Bitcoin Stack exchange, two perspectives.

1. Double-spending is fraud so definitely illegal.

2. The decentralized/unregulated nature of cryptocurrencies with no clear cut regulations/laws.


Last month Bitcoin Gold and Verge suffered a 51% attack, just a week ago, it was Zencash. I think rather than legal or illegal, it's about how easy to carry out a 51% on coins with low hashrate and get away with it. There is even a website that gives a theoretical cost (renting hashing power from NiceHash) of a 51% attack on PoW coins.

https://bitcoin.stackexchange.com/questions/4306/is-performing-a-51-attack-double-spend-on-bitcoin-illegal

https://www.crypto51.app/

Is the attack "51%" legal? In which countries is such an attack pursued by law?
The thing is that I was wondering if there will be any consequences for mining pools (other than loss of reputation) that will make the Attack "51%"?