Tokens are to Web3 as web pages are to Web1.#
Tokens do not represent digital files sent from one device to another. Instead, they manifest as entries in a ledger belonging to a blockchain address. Only those who possess the private key to that address can access the corresponding tokens using wallet software that serves as a blockchain client.
Tokens are commonly used in the design of consensus mechanisms, which refer to the process of network nodes recording and validating block transactions. A reliable consensus mechanism can withstand Sybil attacks and other malicious attacks from network nodes. Take proof of work (PoW) as an example:
How is Proof of Work (PoW) designed?
Proof of Work is a consensus mechanism used in Bitcoin and similar blockchain networks. It guides the collective actions of unknown anonymous network actors to ensure that token transactions sent through the network are valid. The premise is that this mechanism is built upon the assumption that all network nodes are potentially corrupt.
-
It adopts an economic incentive measure in the form of native network tokens to reward compliant network nodes. If you spend money and follow the rules, you can earn network tokens through mining.
(Note: By participating in this competition to find the hash value, mining nodes collectively ensure that all transactions included in a block are valid. The winning node will receive a "block reward" in the form of newly minted network tokens (plus potential transaction fees). This process is called "mining".)
-
The cost outweighs the benefits because mining requires specialized computer hardware and finding the correct hash value requires some work in the form of computer processing time. This process consumes a significant amount of electricity, making cheating unprofitable.
How can network attacks be carried out?
Network attacks are not impossible to execute, and similarly, the public ledger of a blockchain network is not absolutely tamper-proof. When an attacker wants to modify and delete transaction entries on the ledger, all blocks must be recalculated. This would require controlling or bribing the majority of network nodes (requiring the support of 51% of the nodes). The cost of bribery far exceeds the potential rewards of attacking the network, making manipulation possible but impractical.
When an individual or organization is able to control the majority of computational power to manipulate the network, a "51% attack" occurs. In the ten-year history of Bitcoin, no external attacker has successfully manipulated it.
References:
Read the English version online: https://github.com/sherminvo/TokenEconomyBook/wiki
Read the Chinese version online: https://github.com/Token-Economy-Book/ChineseTranslation/wiki/0.1-Introduction