Majority is not Enough: Bitcoin Mining is Vulnerable Ittay Eyal and Emin Gün Sirer Department of Computer Science, Cornell University Presented By Ovia Seshadri, CSE IITD
The original version of this paper was Published in Financial Cryptography and Data Security (FC 2014). Lecture Notes in Computer Science 8437, Springer; https://link.springer.com/ chapter/10.1007/978-3-662-45472-5_28 Laid foundations for the well known Selfish Mining Attack Cited by 896 and counting Gained popularity in all Financial markets and news
Preliminaries Blockchain, Bitcoin, PoW, Hashing Power, Mining, Pools Forks Longest chain Rule, Majority, 51% attack Block Rewards, Difficulty
Discussion An Honest majority is an important requirement!! Miners are independent and self motivated Best strategy must be to play honest A Blockchain must be fair! Incentive – compatibility Are pools a problem??
Miner controls 25% he gets 1 block every 4 blocks
Paper Contributions Bitcoin Mining is not incentive Compatible Incentive to form pools and strategy to benefit pools Possibility of system collapse above a threshold A possible solution to increase threshold.
Selfish Mining Selfish Mining outperforms honest mining GOAL: Get more that fair share HOW: Maintain secret blocks, publish judiciously INTUITION: Risk some work, Others waste a lot more.
Attacker tries to create as long a secret chain as possible Publish secret branch just before losing lead (assuming no latency)
Also Publish when the lead is lost!! Intentional public fork - RACE Risk - RACE Also Publish when the lead is lost!! Intentional public fork - RACE
Markov Chain model
Fraction of Attacker’s hash power - α
System is partitioned at every arrival. The system grows at the same rate left to right or right to left. Pi – is the probability of being at ith state.
Where 0<=α<=1/2
Solution Discussion System Collapse – Even attackers are invested in the coin Altruistic Agents – moral nodes Naïve Lines of Defense – police infiltration into selfish pools Imminent Danger
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