What Is the Concept of “Selfish Mining” and How Does It Differ from Fee Sniping?
Selfish mining is a strategy where a miner or pool secretly mines blocks and withholds them from the public network, only releasing them strategically to gain a disproportionately large share of the block rewards. It is a long-term attack on the network's fairness.
Fee sniping, in contrast, is a short-term, opportunistic attempt to steal the transaction fees of a single, recently mined block found by a competitor. Selfish mining is about manipulating chain length; fee sniping is about manipulating block content.
Glossar
Transaction Fees
Cost ⎊ Transaction fees represent a quantifiable expense incurred for processing and validating transactions across diverse financial systems, functioning as a critical component of network participation and security.
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.
Selfish Mining Strategy
Incentive ⎊ Selfish mining represents a strategic deviation from honest block propagation within Proof-of-Work cryptocurrency networks, prioritizing private chain construction for potential revenue gain.
Hash Rate
Power ⎊ Hash rate quantifies the total computational power dedicated to solving the cryptographic puzzle in a Proof-of-Work network.
Fee Sniping
Definition ⎊ Fee sniping describes a specific type of Miner Extractable Value (MEV) strategy where a miner observes a high-value transaction in the mempool and attempts to capture the associated profit by including a competing transaction in the same block.
Selfish
Exploitation ⎊ In cryptocurrency derivatives and options trading, "selfish" denotes a strategic, albeit controversial, behavior primarily observed in Bitcoin mining.