Death Spiral
A death spiral is a severe proof-of-work feedback loop where falling hash rate slows blocks, weakens confidence, and drives more miners away.
A death spiral is a feared proof-of-work scenario where many miners leave, blocks become much slower, user confidence falls, the coin price drops, and mining becomes even less attractive. It is a feedback loop, not an automatic outcome of every hash-rate decline.
The danger is greatest when difficulty adjusts slowly, liquidity is thin, and miners can redirect hardware easily. Slower blocks delay confirmations, reduce transaction throughput, and may make exchanges or merchants pause deposits.
Responsive difficulty adjustment algorithms, emergency checkpoints, merged mining, and conservative exchange confirmation policies can reduce the risk. These mitigations have tradeoffs, such as more complexity or greater reliance on trusted operators.
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