What Is a “Sybil Attack” and Why Is It Less Effective on a Consortium Chain?
A Sybil attack is a security threat where a single entity attempts to gain a disproportionately large influence over a decentralized network by creating and operating multiple false identities (nodes). It is less effective on a consortium chain because the network is permissioned.
New nodes cannot join without the explicit approval and vetting of the governing consortium. This pre-approval process prevents an attacker from creating multiple pseudonymous identities to gain a majority stake.
Glossar
Sybil Attack
Architecture ⎊ The Sybil attack, within cryptocurrency, options trading, and financial derivatives, exploits the inherent design vulnerabilities of distributed systems reliant on identity-based consensus.
Consortium Chain
Structure ⎊ A Consortium Chain represents a specific blockchain structure where the consensus mechanism and transaction validation are controlled by a limited, pre-selected group of entities, rather than being open to the public.
Pseudonymous Identities
Anonymity ⎊ Pseudonymous identities within cryptocurrency, options trading, and financial derivatives represent a dissociation between on-chain or trading activity and verifiable real-world identification, impacting market surveillance and regulatory oversight.
Pre-Approval Process
Process ⎊ The pre-approval process establishes a formal procedure for evaluating potential participants before granting them access to a permissioned network.