Every day new members are joining hive and crypto without knowing some of the basic things about the technology and the security around it so i thought making a post about it hoping it could help anyone reading and making him to understand crypto a bit better and of start reading more before buying anything

Hashrate

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Cryptocurrency networks, such as Bitcoin and in the pas Ethereum, use a process called mining to secure and validate transactions. Mining involves solving complex mathematical puzzles using computational power. The rate at which these puzzles are solved is called hashrate and is measured in hashes per second (H/s), kilohashes per second (KH/s), megahashes per second (MH/s), gigahashes per second (GH/s), terahashes per second (TH/s), or even petahashes per second (PH/s).

Why Does Hashrate Matter?

Rewards: Miners compete to solve these puzzles, and a higher hashrate increases their chances of winning rewards in the form of cryptocurrency coins or tokens.

Network Security: Hashrate is vital for the security of cryptocurrency networks. A higher total hashrate makes it more difficult for malicious actors to manipulate the blockchain's history through a 51% attack.

Difficulty Adjustment: Cryptocurrencies like Bitcoin adjust puzzle difficulty based on the network's hashrate. When hashrate increases, puzzles become harder to solve, maintaining a block confirmation time of around 10 minutes.

Proof of Work (PoW) Networks Security attacks source

51% Attack: A 51% attack is a significant governance threat. It happens when a single entity or group of miners controls more than 50% of the total network's hashrate. With majority control, they can potentially manipulate transaction confirmations, double-spend, or censor transactions, undermining the network's integrity.

Mining Pool Centralization: While not a traditional governance attack, centralization of mining power in a few large mining pools can impact the governance dynamics. These pools may vote together or make decisions collectively, affecting network upgrades or decisions.

Miner Collusion: Miners with significant hashrate can collude to manipulate the network. They may coordinate to veto protocol upgrades or favor certain transactions.

Proof of Stake (PoS)source

Proof of Stake (PoS) is a consensus mechanism used in blockchain networks to achieve agreement on the state of the blockchain and validate transactions.

Validators: In a PoS network, validators are individuals or entities responsible for creating new blocks and validating transactions. To become a validator, participants must lock up a certain number of cryptocurrency tokens as collateral, which demonstrates their commitment to the network's security.

Staking: Validators lock up their tokens in a process known as staking. The number of tokens staked often determines the likelihood of being chosen to create a new block and validate transactions. Validators have a vested interest in maintaining the integrity of the network because their staked tokens can be forfeited if they act maliciously.

Block Creation: Validators take turns creating new blocks and confirming transactions. The probability of being chosen as a validator for a particular block is typically proportional to the number of tokens they have staked. This process is often referred to as "forging" or "minting" rather than "mining."

Consensus: Consensus in PoS is achieved when a supermajority of validators agree on the validity of a block and its transactions. This consensus is reached through a variety of mechanisms, such as Byzantine Fault Tolerance (BFT) or Delegated Proof of Stake (DPoS).

Rewards: Validators who successfully create blocks and validate transactions are rewarded with transaction fees and, sometimes, newly created cryptocurrency tokens. These rewards incentivize validators to act honestly and maintain the network.

Proof of Stake (PoS) Networks Security attacks

Long-Range Attack: In PoS networks, long-range attacks are a potential governance concern. This attack involves a malicious actor creating an alternate blockchain from a point in the past when they had a significant stake. They then attempt to replace the current blockchain with their forged version.

Nothing-at-Stake Attack: PoS networks rely on validators to propose and validate blocks. A nothing-at-stake attack occurs when validators validate multiple competing chains simultaneously, as there's no cost associated with doing so. This can lead to chain forks and confusion about the true state of the network.

Stake Grinding: Stake grinding is an attack where validators manipulate the order of transactions in blocks to their advantage. By strategically selecting transactions, they can increase their chances of being chosen as validators for future blocks.

Sybil Attacks: While not unique to PoS, Sybil attacks can also impact governance in PoS networks. Malicious actors may create multiple fake identities (Sybil nodes) to control a significant portion of the voting power, allowing them to influence network decisions.

Censorship: Validators in a PoS network may engage in censorship by refusing to include specific transactions or blocks. This can impact the network's functionality and fairness.

Nothing-to-Lose Attack: In some PoS systems, validators are required to lock up a bond or stake as collateral. A nothing-to-lose attack occurs when a validator with nothing to lose acts maliciously, as they have no significant stake at risk.

Governance Attacks in DAOs

Decentralized Autonomous Organizations (DAOs) are organizations run by code and governed by their token holders. A governance attack in a DAO occurs when malicious actors manipulate the decision-making process to their advantage.

Vote Buying: Malicious actors offer financial incentives for votes, compromising the voting process.

Flash Loans: Attackers use flash loans to manipulate token prices and vote outcomes temporarily, exploiting vulnerabilities in the system.

Token Concentration: A small group holding a majority of governance tokens can easily sway voting outcomes.

Smart Contract Exploits: Vulnerabilities in DAO smart contracts can be exploited to gain control or manipulate operations.

Links to read:
https://bitcoin.org/bitcoin.pdf
https://www.investopedia.com/terms/p/proof-work.asp
https://www.investopedia.com/terms/p/proof-stake-pos.asp
https://www.investopedia.com/hash-rate-6746261
https://en.wikipedia.org/wiki/Bitcoin
https://www.investopedia.com/tech/what-dao/
https://www.sciencedirect.com/topics/computer-science/sybil-attack#:~:text=A%20Sybil%20attack%20is%20one,gain%20a%20disproportionately%20large%20influence.

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