How Does Decentralized Mining Mitigate the Risk of a 51% Attack?
Decentralized mining means that the total network hash rate is distributed among a very large number of independent miners and pools. When no single entity controls a significant portion of the hash rate, it becomes prohibitively expensive and logistically difficult for any one group to acquire the 51% needed for an attack.
A high degree of decentralization is key to the security of a PoW network.
Glossar
Prohibitively Expensive
Constraint ⎊ Prohibitively expensive pricing within cryptocurrency derivatives manifests as a barrier to entry for many participants, effectively limiting market access based on capital requirements.
Anti-Trust Laws
Enforcement ⎊ Antitrust laws, when applied to cryptocurrency markets, address concerns regarding market manipulation, particularly within decentralized exchanges and derivative platforms.
Independent Miners
Entity ⎊ Independent Miners are individual participants in a Proof-of-Work network who operate their own hardware and submit their computational work directly to the blockchain, bypassing the pooling mechanism.
Decentralized Mining
Concept ⎊ Decentralized mining refers to the process where numerous independent participants contribute computational power to validate transactions and secure a blockchain network.
Geographic Distribution
Distribution ⎊ The geographic distribution of cryptocurrency trading activity, options pricing, and financial derivative flows represents a critical factor in assessing systemic risk and identifying localized market inefficiencies.