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In Bitcoin Wiki Weaknesses: Sybil attack they mention that:

"Bitcoin makes these attacks more difficult by only making an outbound connection to one IP address per /16 (x.y.0.0)".

Why would this make a Sybil attack more difficult? Is there a reason for choosing a /16 subnet or is it randomly chosen by the developers with no background? Wouldn't it be more secure to choose a smaller subnet?

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When you are buying servers you can order multiple IP per one server, typically in the same /8 or /16 subnet. So 1 server can serve as 100 or even 1000 Bitcoin nodes.

Ordering lots of IPs in lots of different /16 subnets is rarely possible for the same server.

Hence this change makes it harder/more expensive to launch 1000's of rogue Bitcoin nodes - you will have to distribute them across large number of servers in different datacenters.

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