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CFA Level I · CFA Level I Exam · Introduction to Digital Assets

A proof-of-work cryptocurrency's miners face rising electricity costs, and many unprofitable miners shut down, reducing the network's computing power. The consequence most likely to follow is:

A fall in network computing power from miners exiting most likely lowers the cost of a majority-control attack. In proof-of-work systems, security rests on the resources committed to validation, so with less total hash power an attacker needs fewer resources to control most of it.

  1. Aa lower cost of mounting a majority-control attack on the networkCorrect
  2. Ba higher cost of mounting a majority-control attack on the network
  3. Cno change in network security because supply of tokens is fixed

Explanation

In proof-of-work systems, security depends on the computing power committed to validation. When miners exit, total hash power falls, so an attacker needs fewer resources to control a majority of it. Fixed token supply does not offset this reduced security.

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