Chain Reorganization Risk refers to the possibility that a previously accepted block on a blockchain becomes orphaned or replaced by an alternative block sequence. This event occurs when a longer, valid chain is discovered by network participants, causing a rollback of transactions on the shorter chain. Such a risk is inherent in proof-of-work blockchains, particularly during periods of low network hash rate or malicious attacks. It introduces uncertainty regarding transaction finality.
Context
News about Chain Reorganization Risk typically pertains to security vulnerabilities or network stability concerns in specific proof-of-work cryptocurrencies. A significant chain reorganization can lead to double-spending incidents or a temporary disruption of network operations, affecting user confidence and asset value. Protocols aim to mitigate this risk through various consensus rule adjustments or by increasing confirmation requirements for high-value transactions. Monitoring this risk is vital for understanding the security posture of decentralized ledgers.
By integrating a partially synchronous finality gadget with dynamically available consensus, this protocol achieves transaction finality in three slots, fundamentally securing the chain against reorganization risks.
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