A billion laughs attack is a type of denial-of-service (DoS) attack which is aimed at parsers of XML documents. It's also referred to as an XML bomb or as an exponential entity expansion attack. The example attack consists of defining 10 elements, each defined as consisting of 10 of the previous element, with the document consisting of a single instance of the largest element - which expands to 1 billion copies of the first element. In the most frequently cited example, the first element is the string "lol", hence the name "billion laughs". The amount of memory used would likely exceed that available to the process parsing the XML (it certainly would have at the time the vulnerability was first reported).
While the original form of the attack was aimed specifically at XML parsers, the term may be applicable to similar subjects as well.
The problem was first reported as early as 2003, but began to be widely addressed in 2008.
Source: Wikipedia
