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It will cost you nothing to "kill" a Proof-of-Stake crypto-currency

Author

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  • Nicolas Houy

    (GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - ENS de Lyon - École normale supérieure de Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet - Saint-Étienne - CNRS - Centre National de la Recherche Scientifique)

Abstract

It is a widely spread belief that crypto-currencies implementing a proof of stake transaction validation system are less vulnerable to a 51% attack than crypto-currencies implementing a proof of work transaction validation system. In this article, we show that it is not the case and that, in fact, if the attacker's motivation is large enough (and this is common knowledge), he will succeed in his attack at no cost.

Suggested Citation

  • Nicolas Houy, 2014. "It will cost you nothing to "kill" a Proof-of-Stake crypto-currency," Working Papers halshs-00945053, HAL.
  • Handle: RePEc:hal:wpaper:halshs-00945053
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00945053
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    Cited by:

    1. Corbet, Shaen & Lucey, Brian & Urquhart, Andrew & Yarovaya, Larisa, 2019. "Cryptocurrencies as a financial asset: A systematic analysis," International Review of Financial Analysis, Elsevier, vol. 62(C), pages 182-199.
    2. Nicolas Houy, 2014. "The economics of Bitcoin transaction fees," Working Papers 1407, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    3. Jyotir Moy Chatterjee & Le Hoang Son & Srijani Ghatak & Raghvendra Kumar & Manju Khari, 2018. "BitCoin exclusively informational money: a valuable review from 2010 to 2017," Quality & Quantity: International Journal of Methodology, Springer, vol. 52(5), pages 2037-2054, September.
    4. Baocheng Wang & Zetao Li & Haibin Li, 2020. "Hybrid Consensus Algorithm Based on Modified Proof-of-Probability and DPoS," Future Internet, MDPI, vol. 12(8), pages 1-16, July.
    5. Zura Kakushadze & Jim Kyung-Soo Liew, 2018. "CryptoRuble: From Russia with Love," Papers 1801.05760, arXiv.org.
    6. Jian Wang & Qianggang Wang & Niancheng Zhou & Yuan Chi, 2017. "A Novel Electricity Transaction Mode of Microgrids Based on Blockchain and Continuous Double Auction," Energies, MDPI, vol. 10(12), pages 1-22, November.
    7. Russ, Meir, 2016. "The probable foundations of sustainabilism: Information, energy and entropy based definition of capital, Homo Sustainabiliticus and the need for a “new gold”," Ecological Economics, Elsevier, vol. 130(C), pages 328-338.
    8. Tarun Chitra, 2019. "Competitive equilibria between staking and on-chain lending," Papers 2001.00919, arXiv.org, revised Feb 2020.
    9. Nicola Dimitri, 2022. "The Economics of Consensus in Algorand," FinTech, MDPI, vol. 1(2), pages 1-16, May.
    10. Hermann Elendner & Simon Trimborn & Bobby Ong & Teik Ming Lee, 2016. "The Cross-Section of Crypto-Currencies as Financial Assets: An Overview," SFB 649 Discussion Papers SFB649DP2016-038, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.

    More about this item

    Keywords

    Bitcoin; protocol; proof of work; proof of stake; 51% attack;
    All these keywords.

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • Z0 - Other Special Topics - - General

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