ABSTRACT
Cryptocurrencies are based on digitally signed updates to a ledger maintained in a decentralized manner according to consensus mechanisms in compliance with consented protocols. Cryptocurrency systems are often presented as immutable. However, attacks and other chain reorganization possibilities – so-called chain reorgs – challenge the validity of such a claim. In this paper, chain reorg possibilities are explored together with the associated harm and liability for such harm. It is found that while certain chain reorgs may trigger a liability of those who perform the reorg, protocol developers, network participants, and misinforming agents, others may be considered a risk accepted by the participants.
Østbye, Peder, Who Is Liable for a Cryptocurrency System Chain Reorg? (January 5, 2021).
First posted 2021-02-04 12:37:31
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