Abstract
Blockchain-based cryptocurrency replaces centralized institutions with a distributed network of Internet-based miners to generate currency and process financial transactions. Such blockchain systems reach consensus using proof of work (PoW), and the miners participating in PoW join mining pools to reduce the variance for more stable reward income. Prior literature in blockchain security/game theory identified practical attacks in block withholding attack (BWH) and the state of the art fork-after-withholding (FAW), which have the rational and uncooperative attacker compromise a victim pool and pose as a PoW contributor by submitting shares but withholding the blocks. We advance such threat strategy (creating greater reward advantage to the attackers at the expense of the other miners in the victim pool) and introduce the uncle-block attack (UBA) which exploits uncle blocks for block withholding. We analyze UBA’s incentive compatibility and identify and model the critical systems- and environmental- parameters which determine the attack’s impacts. Our analyses and simulations results show that a rational attacker is always incentivized to launch the UBA attack strategy (over FAW or protocol compliance) and that UBA is effective even in the unfavorable networking environment (in contrast, in such case, FAW is reduced to the suboptimal BWH attack and does not make use of the withheld block).
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Notes
- 1.
In significantly rarer cases, an intentional hard fork retains the partition and introduces a new branch/chain. For example, since the launch of the main chain in 2016 (“Homestead”), Ethereum had five hard forks, including three hard forks in 2016 (including the infamous DAO hack incident which split Ethereum and Ethereum Classic), one in 2017, and one in 2019. Intentional soft forks are also used for upgrading the blockchain protocols and rules but, in contrast to hard forks, are backward-compatible to the clients running the older softwares. Such intentional forks are out of scope for this paper and we focus on the accidental forks caused by the block propagation discrepancy in networking, because the accidental forks occur significantly more frequently than the intentional forks and because the intentional forks are treated differently than the accidental forks which get automatically resolved as described by the longest-chain rule without software updates.
- 2.
This terminology for the blocks which are valid solutions but did not become the main blocks can differ across implementations, e.g., in Bitcoin, they are called orphan blocks. We uniformly call them uncle blocks for simplicity but introduce relevant variables, including the reward amount, to generalize it across implementations.
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Chang, SY., Park, Y., Wuthier, S., Chen, CW. (2019). Uncle-Block Attack: Blockchain Mining Threat Beyond Block Withholding for Rational and Uncooperative Miners. In: Deng, R., Gauthier-Umaña, V., Ochoa, M., Yung, M. (eds) Applied Cryptography and Network Security. ACNS 2019. Lecture Notes in Computer Science(), vol 11464. Springer, Cham. https://doi.org/10.1007/978-3-030-21568-2_12
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