Cryptoeconomics basics. Part 3
What are the ways in which the crypto economy enhances the security of bitcoin?
In order to ensure the security of Bitcoin, the majority rule principle has been implemented. By seizing control of most of the network's computing power, attackers could potentially take control of the blockchain. This is often referred to as a 51 percent attack.
This will result in attackers preventing new transactions from being confirmed, or completely cancelling existing transactions in such a scenario. As a consequence, obtaining control over such a large amount of hash power would be extremely difficult as it would require a large amount of hardware, as well as an inordinate amount of electricity in order to do so.
As a result of cryptoeconomics, Bitcoin has become one of the most successful cryptocurrencies in the world. In order to stimulate different types of incentives for different types of participants in the network, Satoshi Nakamoto implemented the assumptions. This assumption about how network participants respond to economic incentives plays a significant role in system security guarantees.
- A reliable accounting unit for rewarding miners would not be possible without the rigidity of the cryptographic protocol. In the absence of miners, one of the main benefits of Bitcoin would be negated, since there would be no confidence in the reliability of the distributed ledger transaction history.
- Based on crypto-economic assumptions, miners and the Bitcoin network form a symbiotic relationship that provides certainty. It should be noted that, although this is a positive sign, it does not guarantee that the system will continue to operate.