Academic Research on Bitcoin Security Vulnerabilities from Derivatives Markets
By
zdw
Kettled twice. Extra chewy, extra trustworthy.
Summary
The article presents a defense of Bitcoin against recent academic criticism, specifically addressing a 2024 research paper by Soroush Farokhnia and Amir Kafshdar Goharshady titled 'Options and Futures Imperil Bitcoin's Security.' The paper argues that Bitcoin derivatives (options and futures) create security vulnerabilities by enabling block-reverting attacks without requiring majority hash power, estimating such an attack would cost roughly $6.77 billion. The author reluctantly defends Bitcoin while acknowledging these academic findings about systemic risks in cryptocurrency markets.
Key quotes
· 4 pulledI find myself in the unusual position of defending Bitcoin from its critics, if only reluctantly.
In 2024 Soroush Farokhnia & Amir Kafshdar Goharshady published Options and Futures Imperil Bitcoin's Security
showed that (i) a successful block-reverting attack does not necessarily require ... a majority of the hash power; (ii) obtaining a majority of the hash power ... costs roughly 6.77 billion ... and (iii) Bitcoin derivatives, i.e. options and futures, imperil Bitcoin’s security by creating an incentive for a block-reverting/majority attack.
It is worth noting that they are not ta
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