What Role Does the Difficulty Adjustment Algorithm Play in Network Security?

The difficulty adjustment algorithm is crucial for network security by maintaining a predictable block generation rate, regardless of fluctuations in hashrate. If the hashrate drops suddenly, the algorithm lowers the difficulty, preventing block times from becoming excessively long and keeping the chain operational.

Conversely, if hashrate spikes (e.g. from an attacker), the difficulty increases, making it more expensive to continue the attack. It ensures the economic cost of mining remains high enough to deter malicious actors from easily accumulating 51 percent control.