National University of Singapore（新加坡国立大学）；Tsinghua University（清华大学）；Shanghai Qi Zhi Institute（上海期智研究院）；HKUST (GZ)（香港科技大学（广州））；New York University（纽约大学）；Yau Mathematical Sciences Center（丘成桐数学科学中心）
Zishuo Zhao, Zhixuan Fang, Xuechao Wang, Xi Chen, Hongxu Su, Haibo Xiao, Yuan Zhou
Most concurrent blockchain systems rely heavily on the Proof-of-Work (PoW) or Proof-of-Stake (PoS) mechanisms for decentralized consensus and security assurance. However, the substantial energy expenditure stemming from computationally intensive yet meaningless tasks has raised considerable concerns surrounding traditional PoW approaches, The PoS mechanism, while free of energy consumption, is subject to security and economic issues. Addressing these issues, the paradigm of Proof-of-Useful-Work (PoUW) seeks to employ challenges of practical significance as PoW, thereby imbuing energy consumption with tangible value. While previous efforts in Proof of Learning (PoL) explored the utilization of deep learning model training SGD tasks as PoUW challenges, recent research has revealed its vulnerabilities to adversarial attacks and the theoretical hardness in crafting a byzantine-secure PoL mechanism. In this paper, we introduce the concept of incentive-security that incentivizes rational provers to behave honestly for their best interest, bypassing the existing hardness to design a PoL mechanism with computational efficiency, a provable incentive-security guarantee and controllable difficulty. Particularly, our work is secure against two attacks, and also improves the computational overhead from $Θ(1)$ to $O(\frac{\log E}{E})$. Furthermore, while most recent research assumes trusted problem providers and verifiers, our design also guarantees frontend incentive-security even when problem providers are untrusted, and verifier incentive-security that bypasses the Verifier's Dilemma. By incorporating ML training into blockchain consensus mechanisms with provable guarantees, our research not only proposes an eco-friendly solution to blockchain systems, but also provides a proposal for a completely decentralized computing power market in the new AI age.
In this document, we define the NADA security architecture based on refined use case scenarios, a derived high level model and security analysis. For the architecure design and verification we are applying the well known STRIDE model.
Imagine that a malicious hacker is trying to attack a server over the Internet and the server wants to block the attack packets as close to their point of origin as possible. However, the security gateway ahead of the source of attack is untrusted. How can the server block the attack packets through this gateway? In this paper, we introduce REMOTEGATE, a trustworthy mechanism for allowing any party (server) on the Internet to configure a security gateway owned by a second party, at a certain agreed upon reward that the former pays to the latter for its service. We take an interactive incentive…
Information sharing among organizations has been gaining attention as a method for improving cybersecurity. However, the associated disclosure costs act as deterrents for firms' voluntary cooperation. In this work, we take a game-theoretic approach to understanding firms' incentives in these agreements. We propose the design of inter-temporal incentives (i.e. conditioning future cooperation on past interactions). Specifically, we show that incentives for full cooperation can be designed if firms share their private assessments of other firms' disclosure decisions through a common communication…
Cryptocurrencies have garnered much attention in recent years, both from the academic community and industry. One interesting aspect of cryptocurrencies is their explicit consideration of incentives at the protocol level. Understanding how to incorporate this into the models used to design cryptocurrencies has motivated a large body of work, yet many open problems still exist and current systems rarely deal with incentive related problems well. This issue arises due to the gap between Cryptography and Distributed Systems security, which deals with traditional security problems that ignore the …
We introduce a model for a market based economic system of cyber-risk valuation to correct fundamental problems of incentives within the information technology and information processing industries. We assess the makeup of the current day marketplace, identify incentives, identify economic reasons for current failings, and explain how a market based risk valuation system could improve these incentives to form a secure and robust information marketplace for all consumers by providing visibility into open, consensus based risk pricing and allowing all parties to make well informed decisions.
Sophisticated mass attacks, especially when exploiting zero-day vulnerabilities, have the potential to cause destructive damage to organizations and critical infrastructure. To timely detect and contain such attacks, collaboration among the defenders is critical. By correlating real-time detection information (alerts) from multiple sources (collaborative intrusion detection), defenders can detect attacks and take the appropriate defensive measures in time. However, although the technical tools to facilitate collaboration exist, real-world adoption of such collaborative security mechanisms is s…
With the expansion of the Internet of Things (IoT), the number of security incidents due to insecure and misconfigured IoT devices is increasing. Especially on the consumer market, manufacturers focus on new features and early releases at the expense of a comprehensive security strategy. Hence, experts have started calling for regulation of the IoT consumer market, while policymakers are seeking for suitable regulatory approaches. We investigate how manufacturers can be incentivized to increase sustainable security efforts for IoT products. We propose mandatory security update labels that info…
We study the security of interaction protocols when incentives of participants are taken into account. We begin by formally defining correctness of a protocol, given a notion of rationality and utilities of participating agents. Based on that, we propose how to assess security when the precise incentives are unknown. Then, the security level can be defined in terms of defender sets, i.e., sets of participants who can effectively "defend" the security property as long as they are in favor of the property. We present some theoretical characterizations of defendable protocols under Nash equilibri…
This work proposes a novel proof-of-work blockchain incentive scheme such that, barring exogenous motivations, following the protocol is guaranteed to be the optimal strategy for miners. Our blockchain takes the form of a directed acyclic graph, resulting in improvements with respect to throughput and speed. More importantly, for our blockchain to function, it is not expected that the miners conform to some presupposed protocol in the interest of the system's operability. Instead, our system works if miners act selfishly, trying to get the maximum possible rewards, with no consideration for th…
Formal analyses of incentives for compliance with network protocols often appeal to game-theoretic models and concepts. Applications of game-theoretic analysis to network security have generally been limited to highly stylized models, where simplified environments enable tractable study of key strategic variables. We propose a simulation-based approach to game-theoretic analysis of protocol compliance, for scenarios with large populations of agents and large policy spaces. We define a general procedure for systematically exploring a structured policy space, directed expressly to resolve the qu…
We present an overview of hybrid Casper the Friendly Finality Gadget (FFG): a Proof-of-Stake checkpointing protocol overlaid onto Ethereum's Proof-of-Work blockchain. We describe its core functionalities and reward scheme, and explore its properties. Our findings indicate that Casper's implemented incentives mechanism ensures liveness, while providing safety guarantees that improve over standard Proof-of-Work protocols. Based on a minimal-impact implementation of the protocol as a smart contract on the blockchain, we discuss additional issues related to parametrisation, funding, throughput and…
A blockchain faces two fundamental challenges. It must motivate users to maintain the system while preventing a minority of these users from colluding and gaining disproportionate control. Many popular public blockchains use monetary incentives to encourage users to behave appropriately. But these same incentive schemes create more problems than they solve. Mining rewards cause centralization in "proof of work" chains such as Bitcoin. Validator rewards and punishments invite attacks in "proof of stake" chains. This paper argues why these incentive schemes are detrimental to blockchain. It cons…
Internet of Things (IoT) is highly vulnerable to emerging Advanced Persistent Threats (APTs) that are often operated by well-resourced adversaries. Achieving perfect security for IoT networks is often cost-prohibitive if not impossible. Cyber insurance is a valuable mechanism to mitigate cyber risks for IoT systems. In this work, we propose a bi-level game-theoretic framework called FlipIn to design incentive-compatible and welfare-maximizing cyber insurance contracts. The framework captures the strategic interactions among APT attackers, IoT defenders, and cyber insurance insurers, and incorp…
RepChain: A Reputation-based Secure, Fast and High Incentive Blockchain System via Sharding
Hong Kong University of Science and Technology（香港科技大学）；Huazhong University of Science and Technology（华中科技大学）；Oasis Futrue (Shenzhen) Holdings（绿洲未来（深圳）控股有限公司）
Blockchains have recently gained popularity thanks to their ability to record "digital truth". They are designed to keep persistence, security, and avoid attacks which is useful for many applications. However, they are still problematic in their energy consumption, governance, and scalability Current solutions either require vast computing power via Proof-of-Work (PoW) or cannot directly utilize computing power as a resource in virtual mining. Here, we propose incentive-based protocols that use competitions to integrate computing power into blockchains. We introduce Proof-of-Accumulated-Work (…
Anti-piracy is fundamentally a procedure that relies on collecting data from the open anonymous population, so how to incentivize credible reporting is a question at the center of the problem. Industrial alliances and companies are running anti-piracy incentive campaigns, but their effectiveness is publicly questioned due to the lack of transparency. We believe that full transparency of a campaign is necessary to truly incentivize people. It means that every role, e.g., content owner, licensee of the content, or every person in the open population, can understand the mechanism and be assured a…
In the Zendoo whitepaper we introduced a novel SNARK-based construction that allows Bitcoin-like blockchains to create and communicate with sidechains of different types without knowing their internal structure. We also introduced a specific construction, called Latus, allowing creation of fully verifiable sidechains. In the paper we omitted a detailed description of an incentive scheme for Latus that is an essential element of a real decentralized system. This paper fills the gap by introducing details of the incentive scheme for the Latus sidechain. The represented ideas can also be adopted …
Google Research（谷歌研究院）；Department of Computer Science, University of British Columbia（不列颠哥伦比亚大学计算机科学系）；Department of Economics and Innocenzo Gasparini Institute for Economic Research, Università Bocconi（博科尼大学经济学系和伊诺琴佐·加斯帕里尼经济研究所）
EarthOL: A Proof-of-Human-Contribution Consensus Protocol -- Addressing Fundamental Challenges in Decentralized Value Assessment with Enhanced Verification and Security Mechanisms
In crowdsourcing markets, there are two different type jobs, i.e. homogeneous jobs and heterogeneous jobs, which need to be allocated to workers. Incentive mechanisms are essential to attract extensive user participating for achieving good service quality, especially under a given budget constraint condition. To this end, recently, Singer et al. propose a novel class of auction mechanisms for determining near-optimal prices of tasks for crowdsourcing markets constrained by the given budget. Their mechanisms are very useful to motivate extensive user to truthfully participate in crowdsourcing m…
Proof-of-Stake (PoS) blockchain systems, especially those that allow stakeholders to organize themselves in ``stake-pools'', have emerged as a compelling paradigm for the deployment of large scale distributed ledgers. A stake-pool operates a node that engages in the PoS protocol and potentially represents a large number of smaller stakeholders. While such pooled PoS operation is attractive from various angles, it also exhibits a significant shortcoming that, so far and to the best of our knowledge, has not been sufficiently understood or investigated. Pooled PoS operation, to be effective and …
Bitcoin is a popular cryptocurrency that records alltransactions in a distributed append-only public ledger calledblockchain. The security of Bitcoin heavily relies on the incentive-compatible proof-of-work (PoW) based distributed consensus pro-tocol, which is run by network nodes called miners. In exchangefor the incentive, the miners are expected to honestly maintainthe blockchain. Since its launch in 2009, Bitcoin economy hasgrown at an enormous rate, and it is now worth about 170 billions of dollars. This exponential growth in the market valueof Bitcoin motivates adversaries to exploit wea…
A large number of IoT devices are connected via the Internet. However, most of these IoT devices are generally not perfect-by-design even have security weaknesses or vulnerabilities. Thus, it is essential to update these IoT devices securely, patching their vulnerabilities and protecting the safety of the involved users. Existing studies deliver secure and reliable updates based on blockchain network which serves as the transmission network. However, these approaches could compromise users privacy when updating the IoT devices. In this paper, we propose a new blockchain based privacy-preservin…
Analyzing Reward Dynamics and Decentralization in Ethereum 2.0: An Advanced Data Engineering Workflow and Comprehensive Datasets for Proof-of-Stake Incentives
A first-order conditional logic is considered, with semantics given by a variant of epsilon-semantics, where p -> q means that Pr(q | p) approaches 1 super-polynomially --faster than any inverse polynomial. This type of convergence is needed for reasoning about security protocols. A complete axiomatization is provided for this semantics, and it is shown how a qualitative proof of the correctness of a security protocol can be automatically converted to a quantitative proof appropriate for reasoning about concrete security.
The security of most existing cryptocurrencies is based on a concept called Proof-of-Work, in which users must solve a computationally hard cryptopuzzle to authorize transactions (`one unit of computation, one vote'). This leads to enormous expenditure on hardware and electricity in order to collect the rewards associated with transaction authorization. Proof-of-Stake is an alternative concept that instead selects users to authorize transactions proportional to their wealth (`one coin, one vote'). Some aspects of the two paradigms are the same. For instance, obtaining voting power in Proof-of-…
While Proof-of-Work (PoW) is the most widely used consensus mechanism for blockchain, it received harsh criticism due to its massive waste of energy for meaningless hash calculation. Some studies have introduced Proof-of-Stake to address this issue. However, such protocols widen the gap between rich and poor and in the worst case lead to an oligopoly, where the rich control the entire network. Other studies have attempted to translate the energy consumption of PoW into useful work, but they have many limitations, such as narrow application scope, serious security issues and impractical incenti…
Existing permissionless blockchain solutions rely on peer-to-peer propagation mechanisms, where nodes in a network transfer transaction they received to their neighbors. Unfortunately, there is no explicit incentive for such transaction propagation. Therefore, existing propagation mechanisms will not be sustainable in a fully decentralized blockchain with rational nodes. In this work, we formally define the problem of incentivizing nodes for transaction propagation. We propose an incentive mechanism where each node involved in the propagation of a transaction receives a share of the transactio…
Cryptocurrency exchanges are frequently targeted and compromised by cyber-attacks, which may lead to significant losses for the depositors and closure of the affected exchanges. These risks threaten the viability of the entire public blockchain ecosystem since exchanges serve as major gateways for participation in public blockchain technologies. In this paper, we develop an economic model to capture the short-term incentives of cryptocurrency exchanges with respect to making security investments and establishing transaction fees. Using the model, we derive conclusions regarding an exchange's o…
We model incentive security in non-custodial stablecoins and derive conditions for participation in a stablecoin system across risk absorbers (vaults/CDPs) and holders of governance tokens. We apply option pricing theory to derive closed form solutions to the stakeholders' problems, and to value their positions within the capital structure of the stablecoin. We derive the optimal interest rate that is incentive compatible, as well as conditions for the existence of equilibria without governance attacks, and discuss implications for designing secure protocols.
The reliability and security of a user in an interconnected system depends on all users' collective effort in security. Consequently, investments in security technologies by strategic users is typically modeled as a public good problem, known as the Interdependent Security (IDS) game. The equilibria for such games are often inefficient, as selfish users free-ride on positive externalities of others' contributions. In this paper, we present a mechanism that implements the socially optimal equilibrium in an IDS game through a message exchange process, in which users submit proposals about the se…
Blockchain technology has become almost as famous for incidents involving security breaches as for its innovative potential. We shed light on the prevalence and nature of these incidents through a database structured using the STIX format. Apart from OPSEC-related incidents, we find that the nature of many incidents is specific to blockchain technology. Two categories stand out: smart contracts, and techno-economic protocol incentives. For smart contracts, we propose to use recent advances in software testing to find flaws before deployment. For protocols, we propose the PRESTO framework that …
Recently, a Quantum Key Exchange protocol that uses squeezed states was presented by Gottesman and Preskill. In this paper we give a generic security proof for this protocol. The method used for this generic security proof is based on recent work by Christiandl, Renner and Ekert.
Incentive mechanisms are central to the functionality of permissionless blockchains: they incentivize participants to run and secure the underlying consensus protocol. Designing incentive-compatible incentive mechanisms is notoriously challenging, however. As a result, most public blockchains today use incentive mechanisms whose security properties are poorly understood and largely untested. In this work, we propose SquirRL, a framework for using deep reinforcement learning to analyze attacks on blockchain incentive mechanisms. We demonstrate SquirRL's power by first recovering known attacks: …
The Nakamoto longest chain protocol is remarkably simple and has been proven to provide security against any adversary with less than 50% of the total hashing power. Proof-of-stake (PoS) protocols are an energy efficient alternative; however existing protocols adopting Nakamoto's longest chain design achieve provable security only by allowing long-term predictability (which have serious security implications). In this paper, we prove that a natural longest chain PoS protocol with similar predictability as Nakamoto's PoW protocol can achieve security against any adversary with less than 1/(1+e)…
The dominance of a few big companies in the storage market arising various concerns including single point of failure, privacy violation, and oligopoly. To eliminate the dependency on such a centralized storage architecture, several Decentralized Storage Network (DSN) schemes such as Filecoin, Sia, and Storj have been introduced. DSNs leverage blockchain technology to create a storage platform such that the micro storage providers can also participate in the storage market. To verify the accurate data storage by the storage providers during a storage contract, DSNs apply a Proof of Storage (Po…
This paper provides a proof of the proposed Internet standard Transport Level Security protocol using the Gong-Needham-Yahalom logic. It is intended as a teaching aid and hopes to show to students: the potency of a formal method for protocol design; some of the subtleties of authenticating parties on a network where all messages can be intercepted; the design of what should be a widely accepted standard.
Federated learning may be subject to both global aggregation attacks and distributed poisoning attacks. Blockchain technology along with incentive and penalty mechanisms have been suggested to counter these. In this paper, we explore verifiable off-chain computations using zero-knowledge proofs as an alternative to incentive and penalty mechanisms in blockchain-based federated learning. In our solution, learning nodes, in addition to their computational duties, act as off-chain provers submitting proofs to attest computational correctness of parameters that can be verified on the blockchain. W…
The authors discuss what is provable security in cryptography. Think that provable security is asymptotic, relative, and dynamic, and only a supplement to but not a replacement of exact security analysis. Because the conjecture P != NP has not been proven yet, and it is possible in terms of the two incompleteness theorems of Kurt Godel that there is some cryptosystem of which the security cannot or only ideally be proven in the random oracle model, the security of a cryptosystem is between provability and unprovability, and any academic conclusion must be checked and verified with practices or…
Blockchain is a technology that provides a distributed ledger that stores previous records while maintaining consistency and security. Bitcoin is the first and largest decentralized electronic cryptographic system that uses blockchain technology. It faces a challenge in making all the nodes synchronize and have the same overall view with the cost of scalability and performance. In addition, with miners' financial interest playing a significant role in choosing transactions from the backlog, small fee or small fee per byte value transactions will exhibit more delays. To study the issues related…
Bitcoin is the most secure blockchain in the world, supported by the immense hash power of its Proof-of-Work miners, but consumes huge amount of energy. Proof-of-Stake chains are energy-efficient, have fast finality and accountability, but face several fundamental security issues: susceptibility to non-slashable long-range safety attacks, non-slashable transaction censorship and stalling attacks and difficulty to bootstrap new PoS chains from low token valuation. We propose Babylon, a blockchain platform which combines the best of both worlds by reusing the immense Bitcoin hash power to enhanc…
TLS is an end-to-end protocol designed to provide confidentiality and integrity guarantees that improve end-user security and privacy. While TLS helps defend against pervasive surveillance of intercepted unencrypted traffic, it also hinders several common beneficial operations typically performed by middleboxes on the network traffic. Consequently, various methods have been proposed that "bypass" the confidentiality goals of TLS by playing with keys and certificates essentially in a man-in-the-middle solution, as well as new proposals that extend the protocol to accommodate third parties, dele…
