BA-08 · LESSON 08

Attacks and security budget

KEY DEFINITIONS

Terms used in this lesson

Proof-of-work target: The maximum header-hash value accepted for a block; lowering it makes valid hashes harder to find.
Block subsidy: New bitcoin that consensus permits a block's coinbase transaction to create at a particular height.
Hash rate: The number of mining hash attempts performed per second.
UTXO: Unspent transaction output: one discrete chunk of bitcoin that can be used as a transaction input.

Double-spends, selfish mining, censorship, pool concentration, and fee-market uncertainty require economic analysis.

65 min Difficulty 2/5 Not started

VISUAL MODEL

See the whole mechanism before going step by step

Use the diagrams to orient yourself. Then the guided explanation below teaches every part in depth.

4 explanatory views

CONCEPT-SPECIFIC MAP · attack security budgetHash power changes attack capability, not consensus validitySelect any state to inspect its exact role.

RELATIONSHIP MAPOrdered mechanism flow

01
ATTACK CAPACITYAttacker controls 20%
Hash-rate share changes the probability of overtaking recent proof of work and the cost of sustaining censorship.
02
TARGETShort private branch
The attacker can withhold blocks, reorder its own valid candidates, or exclude transactions it sees.
03
VALIDITY LIMITAll blocks still pass node rules
Proof of work cannot forge a key, inflate beyond permitted issuance, or spend an output without satisfying its Script.
04
ECONOMIC COSTLow success probability
Attack economics include hardware, energy, opportunity cost, detection, market response, and the value exposed by the victim.
05
DEFENCEConfirmations reduce risk
A receiver chooses confirmation depth and exposure from a threat model. More confirmations raise the work needed to replace the payment.

Rule shown: A majority of hash power can reorder recent valid history or censor transactions, but it cannot create signatures, spend unavailable outputs, or make full nodes accept an invalid block.

STAGE 1 OF 5ATTACK CAPACITY: Attacker controls 20%

Hash-rate share changes the probability of overtaking recent proof of work and the cost of sustaining censorship.

Governing relationship: A majority of hash power can reorder recent valid history or censor transactions, but it cannot create signatures, spend unavailable outputs, or make full nodes accept an invalid block. Complete path: 1. ATTACK CAPACITY, Attacker controls 20%. Hash-rate share changes the probability of overtaking recent proof of work and the cost of sustaining censorship. 2. TARGET, Short private branch. The attacker can withhold blocks, reorder its own valid candidates, or exclude transactions it sees. 3. VALIDITY LIMIT, All blocks still pass node rules. Proof of work cannot forge a key, inflate beyond permitted issuance, or spend an output without satisfying its Script. 4. ECONOMIC COST, Low success probability. Attack economics include hardware, energy, opportunity cost, detection, market response, and the value exposed by the victim. 5. DEFENCE, Confirmations reduce risk. A receiver chooses confirmation depth and exposure from a threat model. More confirmations raise the work needed to replace the payment.

1. State transitionWhat exists, what changes, and what results

BEFORE

An attacker controls equipment costing $200,000 per hour to operate and forgoes $120,000 of expected honest rewards. Target double-spend value is $250,000.

MECHANISM

Stealing through a reorg, delaying transactions, gaining excess rewards, or disrupting confidence require different resources and success measures.

AFTER

Attack analysis needs an explicit goal, probability, duration, and market path, not a single hash-share slogan.

Text equivalent: Starting from An attacker controls equipment costing $200,000 per hour to operate and forgoes $120,000 of expected honest rewards. Target double-spend value is $250,000. The mechanism begins when Stealing through a reorg, delaying transactions, gaining excess rewards, or disrupting confidence require different resources and success measures. The resulting lesson is Attack analysis needs an explicit goal, probability, duration, and market path, not a single hash-share slogan.

2. Mechanism pathSelect a stage to inspect its job

STAGE 1 OF 5

Define the attack goal

Stealing through a reorg, delaying transactions, gaining excess rewards, or disrupting confidence require different resources and success measures.

Complete path: 1. Define the attack goal: Stealing through a reorg, delaying transactions, gaining excess rewards, or disrupting confidence require different resources and success measures. 2. Model attacker resources: Hash share, private capacity, rented capacity, pool control, capital, energy, network position, and time affect feasibility. 3. Trace node-valid outcomes: Hash power can reorder or censor valid transactions but cannot force nodes to accept invalid scripts, excessive issuance, or invalid proof. 4. Calculate payoff and duration: Compare potential gain with foregone honest rewards, operating cost, detection, price impact, countermeasures, and probability of success. 5. Test concentration and fee assumptions: Pool concentration, template delegation, falling subsidy, and uncertain fee demand influence risk without yielding one permanent security percentage.

3. Rule and failure boundaryWhat accepts the result and where it can stop

ACCEPTED PATH

The bounded model multiplies target value by catch-up probability and subtracts duration times operating plus forgone-reward costs while keeping node validity separate.

CHANGED CONDITION

A positive simplified payoff can disappear after liquidity, detection, or price impact, and no amount of hash power makes an invalid signature or excess subsidy acceptable.

Important distinction: Controlling more than half of hash rate lets an attacker steal arbitrary UTXOs or change the supply limit. Majority hash power can reorganize and censor within valid rules. It cannot create valid signatures for others or make invalid blocks acceptable to unchanged nodes.

Text equivalent: The accepted path is enforced by The bounded model multiplies target value by catch-up probability and subtracts duration times operating plus forgone-reward costs while keeping node validity separate. If the required condition changes, A positive simplified payoff can disappear after liquidity, detection, or price impact, and no amount of hash power makes an invalid signature or excess subsidy acceptable.

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Learn the idea

Mining attacks exploit transaction ordering, temporary chain replacement, or concentrated control. A double-spend replaces a payment history, selfish mining withholds blocks to gain strategic advantage, and censorship excludes selected transactions. The security budget is miner revenue available from subsidy and fees, but attack cost also depends on hardware, energy, market liquidity, duration, and defensive response.

GUIDED EXPLANATION1/5 ideas inspected

Define the attack goal

Stealing through a reorg, delaying transactions, gaining excess rewards, or disrupting confidence require different resources and success measures.

The worked example follows the explanation

Inspect every idea above to open it.

Important distinction“Controlling more than half of hash rate lets an attacker steal arbitrary UTXOs or change the supply limit.”

Majority hash power can reorganize and censor within valid rules. It cannot create valid signatures for others or make invalid blocks acceptable to unchanged nodes.

FINISH LEARNING FIRST

The questions unlock after every required learning activity

Inspect every guided idea, open the worked example, rebuild its mechanism, and complete the deterministic lesson tool. Your progress is saved automatically.