How Does the Cost of Acquiring the Necessary Hash Power Relate to the Potential Profit from a Double-Spend?
The attacker must ensure the potential profit from the double-spend significantly exceeds the cost of acquiring and operating the necessary 51% hash power. The cost includes renting mining equipment, electricity, and any lost opportunity cost.
If the cost of the attack is higher than the value of the double-spent coins, the attack is economically irrational. This economic barrier is the primary defense for high-hash-rate coins.
Low-hash-rate coins have a much lower barrier, making the profit potential higher.
Glossar
Profit Potential
Yield ⎊ Within cryptocurrency derivatives and options trading, yield represents the anticipated return generated from an asset or strategy, intrinsically linked to the profit potential.
Potential Profit
Profit ⎊ This represents the theoretical maximum gain achievable from a deployed strategy or a specific trade structure before accounting for execution costs, slippage, or risk management overlays.
Hash Power
Computation ⎊ Within cryptocurrency networks, hash power represents the total computational capacity dedicated to verifying transactions and securing the blockchain.