If you’ve been paying attention to cryptocurrency news, you’ve probably heard about a number of high profile “51% attacks”, which allow for instances of double spending on the blockchain. This post does a great job of understanding the Game Theory that has undergirded blockchain behaivor, and has been successful in dissuading these types of attacks for a while.
But times are changing, actors are getting more sophisticated, and 2019 may be the year of the 51% attack.
David Vorick comments:
Bitcoin developers strive for something called incentive compatibility. If a protocol has incentive compatibility, it means that the optimal decision for each individual from their own perspective is also the optimal decision for the group as a whole. When protocols are incentive-compatible, individuals can be completely selfish because those selfish actions will benefit the group as well.
Read more at: Fundamentals of Proof of Work
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