smart contract</strong></a>, a marketplace, a <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-decentralized-exchange-dex/">DEX). This is done so that users would take action within the permissionless, decentralized software also being unaware of the errors.</p>\n<p>As an example, let's take the decentralized prediction market platform based on the <a href=https://www.bitdegree.org/"/crypto/buy-ethereum-eth/">Ethereum blockchain - Augur. Some theories state that the prediction markets that are on the platform are subjects of the design flaw attacks. This is because the markets supposedly can trick people into<strong> betting their funds on a flawed contract</strong>, since they have unclear descriptions. This could result in lost funds for the investor.</p>\n<p>Also, these types of attacks could potentially target price feeds and other similar sources of information. The malicious actor can exploit and manipulate any smart contract that depends on the particular data source. This can be achieved due to the protocol or a marketplace having only one price source <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-api/">API./nIt can be discontinued even before the expiration date which offers the attacker an opportunity to complete his plan.</p>\n<p>Usually, a design flaw attack creates fake opportunities that are very visible to consumers, so that they would <strong>lock</strong> their cash within a smart contract. An unfair settlement and a release of capital is an outcome of a faulty, and believable description of some contract terms or the protocol upon which they are based. The description usually illustrates a lot of benefits for the user.</p>\n<p>Moreover, another way a malicious actor could carry on with his design flaw attack is to discover an already existing contract that, indeed, has flaws. Usually, it was created by another person that didn’t have any bad intentions.</p>\n<p>This way, the attack would concentrate on the knowledge imbalance between the attacker and any possible <strong>accessible network member</strong>.</p>","level":"medium","meta_title":"What is Design Flaw Attack? Definition & Meaning | Crypto Wiki","meta_description":"Design Flaw Attack meaning: Design Flaw Attack - a sort of attack that uses the flaws of software design.","meta_keywords":null,"language":"en","created_at":"2022-05-18T10:25:44.000000Z","updated_at":"2022-06-07T11:49:23.000000Z","preview_url":"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-design-flaw-attack"},"prevSection":{"id":976,"original_id":null,"author_id":42,"translator_id":null,"title":"What is Divergence?","slug":"what-is-divergence","section":"D","keyword":"Divergence","status":"published","definition":"a case when an asset’s market price and a certain piece of data (usually a technical indicator) move in opposite directions.","content":"<p>In the world of finance, divergence happens when the market price of an asset moves in the opposite direction of another piece of data. The latter is usually expressed with a <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-are-technical-indicators/">technical indicator</a>.</strong> Traders and investors use divergences to try to figure out if a market trend is weakening. The weakening of the market trend could lead to<strong> a trend reversal or a consolidation period.</strong></p>\n<p>One of the more obvious examples of a divergence-producing indicator would be <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-trading-volume/">trading volume</a>. </strong>When the market price moves in the opposite direction of the trading volume, a divergence occurs. For example, divergence might occur if the price of an asset rises while the trading volume falls.</p>\n<p>Divergences can occur between the market price of an asset and any other piece of data. However, they are mostly associated with technical analysis indicators. Particularly with various oscillator types including <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-klinger-oscillator/">Klinger Oscillator</strong></a>, <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-relative-strength-index-rsi/">Relative Strength Index (RSI)</strong></a>, and <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-stochastic-oscillator/">Stochastic Oscillator</strong></a>.</p>\n<p>There are two types of divergencies – <strong>positive and negative.</strong> When the price of an asset falls but the technical indicator spots a rise in buying (or a fall in selling), a positive divergence occurs. As a result, positive divergence can be interpreted as a <strong>bullish indication.</strong> Besides that, it can even signal an <strong>upward price reversal. </strong></p>\n<p>A negative divergence, on the other hand, occurs when the asset's price rises but the indicator shows a decrease in buying (or an increase in selling).</p>\n<p>Thus, divergences can assist traders in <strong>determining when to open or close a position. </strong>In addition, they can help determine stop-loss levels as well.</p>\n<p>Though keep in mind that you should not be dependent solely on divergencies. This is because they are not always visible. Besides, they can provide misleading trade signals.</p>","level":"easy","meta_title":"What is Divergence? Definition & Meaning | Crypto Wiki","meta_description":"Divergence meaning: Divergence - a case when an asset’s market price and a certain piece of data (usually a technical indicator) move in opposite directions.","meta_keywords":null,"language":"en","created_at":"2022-05-18T06:58:52.000000Z","updated_at":"2022-06-07T11:49:23.000000Z","preview_url":"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-divergence"},"currentChapter":"D","currentSection":"what-is-difficulty-bomb","chapterTitle":"D","readingLevel":"easy"},"url":"/crypto/learn/crypto-terms/what-is-difficulty-bomb","version":"cdd198d50cbe5c9c21c9329d7c096ffc"}" class="container-fluid d-flex crypto-book p-0"> Crypto Terms: Letter D
What is Difficulty Bomb?
Difficulty Bomb MEANING:
Difficulty Bomb -
the amplification of mining difficulty within the Ethereum blockchain as a means to transition from a Proof-of-Work system to a Proof-of-Stake system.
Let's find out Difficulty Bomb meaning, definition in crypto,
what is Difficulty Bomb,
and all other detailed facts.
Difficulty Bomb refers to the increasing difficulty of mining on Ethereum with a Proof-of-Work mechanism. The difficulty increases per specific block heights. It’s a part of the gradual shift to Ethereum 2.0 that uses a Proof-of-Stake consensus mechanism.
The key part of the mining process is solving a complex mathematical puzzle. The miner that does it first receives the mining reward.
Currently, miners take 10 to 20 seconds to solve a Proof-of-Work mining puzzle. As the number of miners increases, so does the speed of solving these puzzles. The difficulty bomb was created to tackle this problem.
As the puzzles become more and more difficult, it will be less and less profitable to continue mining on the old chain. The ultimate goal of the difficulty bomb is to discourage miners from generating blocks under the Proof-of-Work mechanism. Which will lead to the old chain being abandoned and, in essence, frozen in time.
Moreover, the difficulty bomb is a preventative measure for forking the Ethereum blockchain into two separate blockchains.
It also makes sure that the development of the Ethereum blockchain doesn’t become stagnant. This is a necessary step to maintain a stable and usable blockchain.
