0

Hint

I asked this question in a similar style already on bitcointalk and on bitcoin.stackexchange. But in these threads, there are no good answers and I thought maybe it would be better to ask the question in a PoW critical environment.


The question

What can be done in PoW-currencies, if there is a majority attack aimed to bring the value of the coin down by somebody who holds a leverage short position? Or in other words: How can we trust miners, if they can profit more from doing strange things during holding a leverage short position than from the transaction fees? When leverage shorts exist, the attacker can leverage his profit, but how can security of the coin be leveraged?

1 Answer 1

0

No, this will basically always exist in a POW-coin. What would a (necessarily large) miner do though? Stop processing transactions to overload the mem-pool? That might work, but how much would it actually bring down the coin price? It depends if the miner can actively bring down the price enough to make returns from his short.

This is why PoS is good, because an important staker would probably be hurting more from the decrease in value of his coins, rather than from a leveraged short.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service and acknowledge you have read our privacy policy.