Author: ZmnSCPxj 2019-07-20 00:45:32
Published on: 2019-07-20T00:45:32+00:00
The use of short options can be leveraged by those with inside knowledge as an economic attack. Short options are often used by producers of a good in order to hedge their losses and protect against changes in market price. However, this method can also be used to drop the price of a coin and earn from short options. The only protection against this is to make sure that block generators cannot feasibly attack the coin, such as by proof-of-work. Adding more rules to protect against attacks could invite the opposite attack or bring back the original attack except worse. It is expected that market forces will move miners towards efficiency, thus they will not waste energy, only spend exactly enough to maintain the security of the coin. Miners are setting up mines at locations where energy is being wasted and channeling the wasted energy into productive activity.
Updated on: 2023-06-13T20:04:22.870238+00:00