Blockchain mining in pools: Analyzing the trade-off between profitability and ruin

On the profitability of selfish blockchain mining under consideration of ruin

Mining blocks on a blockchain equipped with a proof of work consensus protocol is well-known to be resource-consuming. A miner bears the operational cost, mainly electricity consumption and IT gear, of mining, and is compensated by a capital gain when a block is discovered. This paper aims at quantifying the profitability of mining when the possible event of ruin is also considered. This is done by formulating a tractable stochastic model and using tools from applied probability and analysis, including the explicit solution of a certain type of advanced functional differential equation. The ex…

On profitability of selfish mining

We review the so called selfish mining strategy in the Bitcoin network and compare its profitability to honest mining.We build a rigorous profitability model for repetition games. The time analysis of the attack has been ignored in the previous literature based on a Markov model,but is critical. Using martingale's techniques and Doob Stopping Time Theorem we compute the expected duration of attack cycles. We discover a remarkable property of the bitcoin network: no strategy is more profitable than the honest strategy before a difficulty adjustment. So selfish mining can only become profitable …

Bitcoin Mining Decentralization via Cost Analysis

Bitcoin mining presents a significant economic incentive for efficient hashing and broadcast of data, both parameters stemming from the Proofs of Work used to advance the network. This incentive has led to the development of Bitcoin specific application specific integrated circuits and centralized mining pools, undermining the decentralized motivations behind Bitcoin's design. In addition, the imminent block reward halving threatens the profitability of mining at any scale. Some work has been done in formal models for miner profitability, but existing models do not account for conditions such …

A Deep Dive into Blockchain Selfish Mining

This paper studies a fundamental problem regarding the security of blockchain on how the existence of multiple misbehaving pools influences the profitability of selfish mining. Each selfish miner maintains a private chain and makes it public opportunistically for the purpose of acquiring more rewards incommensurate to his Hashrate. We establish a novel Markov chain model to characterize all the state transitions of public and private chains. The minimum requirement of Hashrate together with the minimum delay of being profitable is derived in close-form. The former reduces to 21.48% with the sy…

审查对工作量证明区块链中共识与激励系统的攻击：一项系统性文献综述

Examining Attacks on Consensus and Incentive Systems in Proof-of-Work Blockchains: A Systematic Literature Review

本文系统性审查了工作量证明区块链中的共识与激励系统攻击，分析了个体攻击及其组合策略对安全性和盈利能力的影响，并提出了预防与减轻威胁的设计指南。