Optimal selfish mining strategies in bitcoin

Ayelet Sapirshtein, Yonatan Sompolinsky*, Aviv Zohar

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

334 Scopus citations

Abstract

The Bitcoin protocol requires nodes to quickly distribute newly created blocks. Strong nodes can, however, gain higher payoffs by withholding blocks they create and selectively postponing their publication. The existence of such selfish mining attacks was first reported by Eyal and Sirer, who have demonstrated a specific deviation from the standard protocol (a strategy that we name SM1). In this paper we investigate the profit threshold – the minimal fraction of resources required for a profitable attack. Our analysis provides a bound under which the system can be considered secure against such attacks. Our techniques can be adapted to protocol modifications to assess their susceptibility to selfish mining, by computing the optimal attack under different variants. We find that the profit threshold is strictly lower than the one induced by the SM1 scheme. The policies given by our algorithm dominate SM1 by better regulating attack-withdrawals. We further evaluate the impact of some previously suggested countermeasures, and show that they are less effective than previously conjectured. We then gain insight into selfish mining in the presence of communication delays, and show that, under a model that accounts for delays, the profit threshold vanishes, and even small attackers have incentive to occasionally deviate from the protocol. We conclude with observations regarding the combined power of selfish mining and double spending attacks.

Original languageAmerican English
Title of host publicationFinancial Cryptography and Data Security - 20th International Conference, FC 2016, Revised Selected Papers
EditorsBart Preneel, Jens Grossklags
PublisherSpringer Verlag
Pages515-532
Number of pages18
ISBN (Print)9783662549698
DOIs
StatePublished - 2017
Event20th International Conference on Financial Cryptography and Data Security, FC 2016 - Christ Church, Barbados
Duration: 22 Feb 201626 Feb 2016

Publication series

NameLecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)
Volume9603 LNCS
ISSN (Print)0302-9743
ISSN (Electronic)1611-3349

Conference

Conference20th International Conference on Financial Cryptography and Data Security, FC 2016
Country/TerritoryBarbados
CityChrist Church
Period22/02/1626/02/16

Bibliographical note

Publisher Copyright:
© International Financial Cryptography Association 2017.

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