Why Is Having a Cost to Fork the Chain Important for Financial Stability?
A cost to fork the chain ensures that creating an alternative, competing history of transactions is economically prohibitive. Without this cost, malicious actors could easily create forks to attempt double-spending or rollback transactions.
This prevents instability and maintains the immutability and finality of the ledger. Financial stability, especially for derivatives and settlement, relies on the certainty of past transactions.
Glossar
Fork Cost
Disruption ⎊ Fork cost, within cryptocurrency and derivative markets, represents the economic consequence of a blockchain fork ⎊ a divergence in the blockchain’s history, creating a new, parallel chain.
Malicious Actors
Exploitation ⎊ Malicious actors within cryptocurrency, options trading, and financial derivatives contexts frequently leverage exploitation of vulnerabilities in protocols, exchanges, or market structures.
High Fork Cost
Impediment ⎊ High fork cost, within cryptocurrency and derivative markets, represents the economic disincentive for network participants to initiate a blockchain fork, particularly a contentious one.
Cost to Fork
Fork ⎊ The term "fork" within cryptocurrency contexts denotes a divergence in a blockchain's history, resulting in two separate chains.