What Is the ‘Cost of Attack’ and How Is It Calculated?
The 'cost of attack' is the total expense incurred by an attacker to successfully execute a 51% attack, primarily to profit from double-spending. For PoW, it's typically calculated as the cost to rent or acquire 51% of the network's hash rate for the required duration, plus the opportunity cost of not mining legitimately.
For PoS, it's the cost to acquire 51% of the coin supply plus the risk of losing it through slashing.
Glossar
Mining
Extraction ⎊ Mining, within the context of cryptocurrency, represents the computationally intensive process of verifying and adding new transaction records to a distributed ledger, typically employing a Proof-of-Work consensus mechanism, and incentivized through the issuance of newly created cryptocurrency and transaction fees.
Coin Supply
Circulation ⎊ Coin supply, within cryptocurrency markets, denotes the number of units currently available for public trading and use, a critical determinant of market capitalization and price discovery.
Network Difficulty
Challenge ⎊ The inherent difficulty adjustment mechanism within blockchain networks, particularly those employing Proof-of-Work consensus, represents a crucial element in maintaining network stability and security.
Opportunity Cost
Sacrifice ⎊ The concept of opportunity cost within cryptocurrency, options, and derivatives fundamentally represents the forgone benefit from selecting one strategy over another.
Block Reward
Incentive ⎊ The block reward, within cryptocurrency networks employing proof-of-work consensus, represents the economic inducement for miners to validate transactions and append new blocks to the blockchain.
Hash Rate
Power ⎊ Hash rate quantifies the total computational power dedicated to solving the cryptographic puzzle in a Proof-of-Work network.