Blockchain security is a complex area that many have misconceptions about. Some assume that the ultimate gauge of security is the amount of hashrate needed to pull off a successful 51% attack, leading to the false assumption that larger chains like BTC are more secure than Bitcoin SV. Others feel the protocols, i.e., moving to proof of stake instead of proof of work, sets blockchains apart when assessing security.
Before you start to worry about double-spending or tampering with transactions, the Bitcoin SV network has already put in place safeguards to its protocols, which in all practical terms, makes attacks on the system illogical. This deterrent occurs alongside the more prominent legal ramifications for anyone caught trying to destabilize or attack a blockchain network.
As Jerry Chan, chief product officer of TAAL Distributed Information Technologies Inc. (CSE:TAAL | FWB:9SQ1 | OTC: TAALF), explained in his latest blog post: “While true that the BSV blockchain does not enjoy the same amount of security as BTC objectively speaking because of its relative hashrate, its security is seen to be good enough for most practical business use cases, and more importantly, clearly enough for supporting a microtransaction economy in which the goods and services purchased are less than $1.”
This article will try to demystify how Bitcoin SV offers enterprise users the safest public blockchain protocols around. It starts with the investment and ends with scalability.
Before starting, it is essential to understand the critical difference between the Proof of Stake (POS) and Proof of Work (POW) network validation models. A shortcomings of the POS system is it relies on a weak subjectivity model of the value loss for dishonest actors. The value loss is the staked native coins miners put up to mine or validate block transactions. Theoretically, these coins would lose market value due to their attack, thus reducing the cost of continuing the attack.
A POW system relies on an objective expenditure of capital. The hash power needed to coordinate a 51% attack on a blockchain is paid in a fiat currency. Unlike a POS system, the attack cost will not change the more prolonged the attack is sustained since the price of running hashing servers on the network is linked to power consumption. This factor alone makes sustained attacks on a POW system less advantageous for cybercriminals.
To summarize, bad actors must examine the cost vs. return to mount a successful attack. Then add to that increasing loss per block of revenue forfeit. With a POS system, that attack’s operational cost is lower. The bad actor only has a one-time loss of the staking coins to initiate and maintain the attack versus the fiat-pegged continual cost of retaining 51% hash dominance in POW.
One cannot merely divert exa-hash from the bigger BTC hash power to control over 50% of the active hash power hashing on the BSV network and harm the community. There is no possibility of stealing coins which do not belong to you. A 51%+ attacking miner would only double-spend their OWN coins or mine no transactions, thus blocking other transactions from getting into the blockchain, i.e. (denial of service).
Having the majority hash power does mean that the bad actor can ‘roll back’ the blockchain, but at a perpetual cost. Once the attack concludes, all the held back or suspended transactions would be mined all at once by the honest miners because BSV has no block size limitation that would prevent the backlog from being cleared immediately.
There is no disruption for any business relying on BSV blockchain unless that business was dependent on the transaction being in a specific block by a particular time. In contrast, BTC has a block size limit that would inhibit its ability to recover from such a 51% denial of service attack.
While the Bitcoin SV blockchain does not have the same amount of hashrate as BTC, its security is beyond sufficient for supporting a microtransaction economy due to its series of fail-safes in place. Additionally, due to its thriving ecosystem, there are so many eyes on the blockchain that any malicious activity would be noticed immediately. BSV has now proven its far superior with real advantages over rival blockchain protocols.
See also: TAAL’s Jerry Chan presentation at CoinGeek Live, The Shift from Bitcoin “Miners” to “Transaction Processors”
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