Security Ratio Problem

Definition ∞ The security ratio problem refers to the challenge of maintaining an adequate level of economic security relative to the value secured by a blockchain network. This problem arises when the cost for an attacker to compromise a network, such as performing a 51% attack, becomes disproportionately low compared to the potential financial gain from such an attack. It is particularly relevant for proof-of-work chains with lower hash rates or proof-of-stake chains with insufficient staked collateral. A low security ratio indicates a heightened vulnerability to malicious actors.
Context ∞ News reports frequently discuss the security ratio problem when analyzing the robustness of smaller or newer blockchain networks, especially after security incidents. Debates around network economics and the incentives for validators or miners often address this issue. Ensuring a high security ratio is critical for maintaining the trustworthiness and long-term viability of any decentralized ledger.