In a Sybil attack, one person or entity attempts to get an unfair advantage in a system or network by creating many identities or nodes cheaply.
Avoiding these attacks is a significant consensus design problem for public blockchain or DLT networks. To commit transactions on a DLT network, nodes need to vote to approve or reject transactions. However, if a simple “one node, one vote” rule is used on a public network, nothing is stopping a bad actor from creating many nodes and getting unfair voting power – a Sybil attack. Another method of voting is needed on an open, public network consensus system.
This is the reason why public blockchain and DLT networks require a Sybil attack prevention mechanism to weight votes more intelligently. Proof of Work (PoW) and Proof of Stake (PoS) are examples of such mechanisms, weighting votes based on scarce resources: computational work and quantity of tokens held, respectively. With these mechanisms, it doesn’t matter if one person spreads their available computational power or token holdings across many nodes or one; their voting power is the same.
While it is still possible for a single actor to gain a large weight of the vote in PoW or PoS networks, the cost of doing so becomes increasingly expensive due to the scarcity of the resource used for vote weighting. As a result, attempting to gain this advantage becomes economically unviable.