What Is a 51% Attack and How Does PoW Prevent It?
A 51% attack occurs if a single entity or group controls more than half (51%) of the network's total hashing power. This dominance would allow them to potentially reverse transactions, double-spend coins, or prevent new transactions from being confirmed.
Proof-of-Work prevents this by making it extremely costly and computationally difficult to acquire and maintain such a large amount of hashing power. The economic incentive favors honest mining.
Glossar
Decentralization Impact
Architecture ⎊ Decentralization impact within cryptocurrency, options trading, and financial derivatives fundamentally alters system architecture, shifting from centralized intermediaries to distributed ledger technologies.
PoW
Mechanism ⎊ PoW, or Proof-of-Work, is the original consensus mechanism requiring participants, or miners, to expend significant computational energy to solve a cryptographic puzzle to validate transactions and append new blocks to the chain.
Economic Incentive
Alignment ⎊ Economic Incentive describes the mechanism by which protocol designers align the self-interest of individual participants with the collective security and desired behavior of the network, often through the issuance of native tokens as rewards or the imposition of penalties.
51% Attack
Dominance ⎊ The 51% attack, within cryptocurrency contexts, represents a scenario where a single entity or coalition controls more than half of a blockchain network's hashing power or stake.
Longest Chain Rule
Consensus Rule ⎊ Longest Chain Rule is the fundamental protocol mechanism dictating that in the event of a temporary fork, the chain exhibiting the greatest cumulative proof of work or stake is recognized as the canonical and valid history, thus finalizing transactions.