A main concern when designing a currency is to make it secure against a variety of attacks. The blockchain realm speaks mostly of the infamous 51% attack – the ledger of Bitcoin for instance can be manipulated by a user who controls 50% plus 1 node [10]. However, as we see below, there are design flaws that have already destroyed user trust in most cryptocurrencies without involving a direct attack. Let’s take a look at how the TENDER deals with some of the attack vectors and avoids design flaws:
Securing the system against 51% attacks
In contrast to single ledger blockchains, where one global consensus is achieved expensively and inefficiently by a group of middlemen (miners, stakeholders or other arbitrators), Pacio consensus is distributed, achieved asynchronously by the involved or interested parties – the users themselves.
Because the number of nodes grows with each user, it becomes increasingly difficult to achieve a majority. But even that would not necessarily compromise the network: if e.g. 51% of the nodes run a manipulated protocol, the worst that would happen would be the equivalent of a fork. The bad nodes would not be able to prove the validity of their transactions to the rest of the network. Each node can decide for itself what is right or wrong. Once it notices misbehaviour among its neighbours, it notifies the network about the breach and cuts connections to the malicious node (more on that in the technical specifications).
This would result in the network being segmented into two different parts by validation rules, i.e. a fork would occur. Both sets of nodes could recover missing data from other local nodes within their networks. Thus, all the work of organising an attack would not permit double spending, rendering an attack pointless.
Solving scale/spam attacks
The “cheapest” way to bring Bitcoin and Ether to a standstill is by spamming them with transactions. An attacker sends thousands of small transactions at the same time with
high transaction fees. This guarantees that only these transactions are processed, bringing the network to a grinding halt. This approach is still costly, but way cheaper than a 51% attack. It is the DDOS attack of cryptocurrencies. This vector only exists because of a single ledger, with every node validating every transaction and the resulting abysmal transaction speed of blockchains. Lightning for Bitcoin and Ethereum 2.0 will make this attack more expensive and thus less likely, but the general problem remains unsolved.
Due to the architecture of Holochain, such scale attacks wouldn’t be successful since the network scales organically with its nodes. A spamming attack would only slow the transaction speed from the attacker to the recipient, but not the whole network.
[10] A special version of 51% attack is “selfish mining”, a problem in proof-of-work coins where miners can control the network when holding a majority of computing power. Bitcoin is quite close to this scenario. Science paper: https://arxiv.org/pdf/1901.04620.pdf
