How Does Network Latency Affect the Profitability Threshold for Selfish Mining?
Higher network latency increases the profitability of selfish mining and lowers the required hashrate threshold. Latency allows the selfish miner more time to extend their private chain before the honest network learns of a newly found block.
If block propagation is slow, the selfish miner's secret chain has a greater chance of becoming the longest chain when revealed. Faster block propagation makes the attack harder to execute effectively, pushing the required hashrate closer to 33%.
Glossar
Selfish Mining
Exploitation ⎊ The concept of selfish mining, initially observed within proof-of-work blockchains like Bitcoin, describes a strategy where a miner withholds solved blocks from the network, broadcasting them later to maximize their reward and gain an unfair advantage.
Required Hashrate
Computation ⎊ Required hashrate, within the context of cryptocurrency, represents the processing power necessary to mine blocks at a specified rate, directly influencing network security and block production time.
Block Propagation
Diffusion ⎊ Block propagation represents the dissemination of newly validated blocks across a peer-to-peer network, fundamentally impacting transaction confirmation times and network security within cryptocurrency systems.
Profitability Threshold
Benchmark ⎊ The Profitability Threshold serves as the minimum performance benchmark that must be surpassed for a derivatives position to generate a net gain after accounting for all costs, including the premium paid or received.
Selfish
Exploitation ⎊ In cryptocurrency derivatives and options trading, "selfish" denotes a strategic, albeit controversial, behavior primarily observed in Bitcoin mining.