What Is the Concept of “Selfish Mining” and How Does It Differ from a 51% Attack?
Selfish mining is a strategy where a miner or pool finds a new block but withholds it from the public network, secretly extending their own private chain. The goal is to gain an unfair advantage in the race to find the next block, increasing their block reward share beyond what their hashrate would mathematically dictate.
A 51% attack, by contrast, requires control of the majority hashrate and is used to actively manipulate the ledger, specifically for double-spending. Selfish mining is an attempt to gain a larger share of mining rewards, not to corrupt the ledger's integrity through a reorg.
Glossar
Block Reward
Incentive ⎊ A block reward serves as the primary economic incentive for miners or validators to participate in securing a blockchain network.
Selfish
Exploitation ⎊ In cryptocurrency derivatives and options trading, "selfish" denotes a strategic, albeit controversial, behavior primarily observed in Bitcoin mining.
Hashrate
Definition ⎊ Hashrate represents the total computational power per second that a miner or the entire network dedicates to solving cryptographic puzzles in a Proof of Work blockchain.
Network Latency
Propagation ⎊ Network latency, within cryptocurrency, options trading, and financial derivatives, represents the time delay for data transmission across a network, critically impacting trade execution speeds and arbitrage opportunities.
Decentralized Governance
Autonomy ⎊ This governance structure dictates that modifications to the protocol's core logic, such as adjusting option expiry rules or collateralization ratios, are determined by the community rather than a centralized body.
Selfish Mining
Block ⎊ The concept of selfish mining, initially observed within the Bitcoin protocol, describes a strategic deviation from standard proof-of-work consensus mechanisms.