Steemit Crypto Academy Contest / S12W5 - Understanding Slashing In Crypto

Slashing? Yes, that's the word for this week's crypto academy contest. This word is not entirely new to me but understanding it as it relates to crypto seems somehow new but I will be explaining my understanding of the topic using the hints below

Use your own words to define what is slashing in Crypto? And do all blockchains apply slashing?

Crypto slashing can be defined as a way of punishing or disciplining Blockchain validators who either intentionally or unintentionally breaks the rules associated with validation in the Blockchain.

Slashing in crypto works like a check on the validators to ensure that they stick to the rules guiding the Blockchain, devoid of inappropriate behaviour, consistently validates the block whenever it is their turn to do so and be held accountable for their mistakes.

This process always reminds the validator to be honest and maintain their integrity while working on the blockchain.

And do all blockchains apply slashing?

Not all blockchains apply slashing in crypto as a deterrent to malicious behaviours in the Blockchain. It is only the blockchains that makes use of Proof Of Stake mechanism that carries out crypto slashing.

This is because, before becoming a validator in any POS Blockchain, you will be expected to stake a certain quantity of that blockchains' coin which would act as a security incase of any misbehaviour by the validator. So when a validator misbehaves, a certain percentage is slashed, meaning that it is removed from the quantity he staked as a penalty for his indecent act. We will explain more about how it works in the next question.

Explain how slashing protects the blockchain, taking an example of a blockchain that applies it.

Earlier on, I said that slashing works with Blockchain that has Proof of Stake as it's consensus mechanism. This determines how individuals interact with the blockchain, its mode of operation and protects it from being manipulated.

Validators are required to ensure the efficiency of the POS network. To be a validator you must buy a certain minimum quantity of the coin and stake it. So all the validators to the Blockchain network collectively stake their coin by locking it up in the system, thus creating a sense of ownership to them in the blockchain because of their personal investment.

So slashing comes in as a consensus mechanism (punishment) to deter these validators from bad and inappropriate behaviours in the Blockchain. This implies that they will lose some percentage of staked coins if they mismanage the power and privilege given to them.

So remember that when a percentage is removed from the amount staked, automatically, he will be removed from being a validator and also lose some of his coins.

So in reality, crypto slashing protects the Blockchain from cheating validators.

Some of the reasons that can cause a validators staked crypto to be slashed are :-

° Downtime - This occurs when a validator is not online for quite a period of time, which leads to a delay in confirmation of blocks in the chain. This clearly proves that the validator is not reliable within the network.

° Double signing: this action occurs when a node or validator signs or authorizes two blocks in the chain at the same time. This happens when a validator runs two servers just in case something goes wrong, the system identifies the validator as having two servers running, which is not acceptable and might even lead to conflict of information. It is purely unacceptable.

° Network Manipulation:- this occurs when it is noticed that a validator signs two blocks for a particular slot of validation.

An example of this is the Polkadot Blockchain. Once it is noticed that a validator is cheating the network or manipulating it, the staked DOT will be slashed and kept in the treasury until the slashing is confirmed. Then, the slashed DOT will be shared among those actually building up the DOT Blockchain. However, the higher the staked DOT, the more slashed coin there will be.

In the Polkadot chain, slashing only occurs when there is 10% of validators that are offline in a particular set. Once that occurs, 0.02% of their staked crypto will be slashed. Sometimes, depending on the severity of the offence, it can be up to 7%

As a blockchain user, how can you avoid slashing?

There are several things that a Blockchain user can do to avoid slashing. If one takes the actions below, slashing can totally be avoided.

° The person should avoid using the same validation keys in two different servers. This act is usually done to act as a backup incase one fails. So if the system detects another server when one is offline, it gives rise to the user being slashed.

° The validator should ensure that his slashing protection history is moved when changing from one machine to another. The movement of this database record protects him from duplicating transactions.

° The user does his best to reduce or totally eliminate the presence of implementation bugs during configuration and setup. This protects him from server failures.

° The user should ensure he does not sign two blocks for the same slot. Doing so immediately flags a malicious intent leading to slashing.

° Consistent system downtime should be avoided by the user. This implies failure on his part to meet up with his obligations as a validator.

Does the Steem blockchain apply this kind of punishment? If not, do you think slashing could be applicable in the first place (technically) and will it be beneficial?

Remember that I said earlier that slashing is applicable to blockchains that uses Proof Of Stake as its consensus mechanism. However, the steem Blockchain uses Delegated Proof of Stake (DPOS) as its consensus mechanism. So the Blockchain does not apply crypto slashing as a form of punishment for validators who misbehaves within the network.

Rather, if there is any witness that acts maliciously in the network, he will be voted out and be replaced immediately by another witness, to mitigate such acts from happening again.

I think that the method the steem blockchain is adopting is ok too. Slashing can also help to protect the network system more if applied.

This is because, just knowing that you have much to lose in terms of crypto slashing will hinder any witness from acting maliciously against the Blockchain.

Just voting them out is not enough punishment since they still have all the funds they staked and still made away with the proceeds of their malicious acts.

So I think that adopting crypto slashing by the Steem Blockchain protects it the more from malicious witnesses.

What are the advantages and limitations of slashing?

Advantages

• It provides an additional layer of security for the Blockchain. Since the slashing will act as deterrence to the witnesses for any inappropriate behaviour from their side. Losing their staked coin is a strong inhibition not to do wrong.

• It leads to more stability of the Blockchain network. Since validators know that their having downtime from their end will lead to their staked crypto being slashed, they will ensure they are available at any time and their server will always be up and running.

• It provides more incentives to trustworthy validators since the slashed crypto will be shared amongst them. So they earn more reward.

• It provides a regulatory framework for the network. Ensures that each validator is held accountable and reliable for his actions.

Disadvantages

° One of the disadvantages is the provision of the technicalities involved in determining when an improper or malicious act have been done. This might really cost a considerable amount of funds

° Sometimes, a validator may be held responsible for a glitch in the network which was not basically caused by him. So losing his funds via slashing will really be painful since it was not a deliberate act.

Conclusion

Crypto slashing is a strong deterrent to inappropriate behaviours with the network. It serves to enforce the rules and regulations guiding the Blockchain network.

When applied well, it strengthens the security of the Blockchain protecting it from hackers.

@cryptoloover @starrchris and @casv to join in this contest

Success to you all!