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Equilibrium analysis of bitcoin block withholding attack: A generalized model

Author

Listed:
  • Wu, Di
  • Liu, Xiang-dong
  • Yan, Xiang-bin
  • Peng, Rui
  • Li, Gang

Abstract

Block withholding attack is an action where a miner who has found a legal block chooses not to submit it but rather directly abandons it. This attack makes the mining pool lose all bitcoin rewards contained within the block. In this paper, we construct a generalized model where two participants can choose to either cooperate with each other or employ a block withholding attack in the mining pool. To make the model more realistic, we consider both the cost of partial proof of work and the cost of cooperation. We also calculate the reward-per-time instead of profit-per-time to better measure the payoffs of each party. Further, we discuss the case where the payoff function and cost function are directly related to the computational power. The pure strategy and mixed strategy are analyzed respectively and the segmentations of the equilibrium are shown. We demonstrate that increasing the information asymmetry by utilizing information conceal mechanisms could lower the occurrence of the BWH attack.

Suggested Citation

  • Wu, Di & Liu, Xiang-dong & Yan, Xiang-bin & Peng, Rui & Li, Gang, 2019. "Equilibrium analysis of bitcoin block withholding attack: A generalized model," Reliability Engineering and System Safety, Elsevier, vol. 185(C), pages 318-328.
    • Handle: RePEc:eee:reensy:v:185:y:2019:i:c:p:318-328
    DOI: 10.1016/j.ress.2018.12.026
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    References listed on IDEAS

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    Cited by:

    1. Di Wu & Xiangbin Yan & Rui Peng & Shaomin Wu, 2020. "Optimal defence-attack strategies between one defender and two attackers," Journal of the Operational Research Society, Taylor & Francis Journals, vol. 71(11), pages 1830-1846, November.
    2. Zhihuai Chen & Bo Li & Xiaohan Shan & Xiaoming Sun & Jialin Zhang, 2022. "Discouraging pool block withholding attacks in Bitcoin," Journal of Combinatorial Optimization, Springer, vol. 43(2), pages 444-459, March.
    3. Gao, Kaiye & Yan, Xiangbin & Liu, Xiang-dong & Peng, Rui, 2019. "Object defence of a single object with preventive strike of random effect," Reliability Engineering and System Safety, Elsevier, vol. 186(C), pages 209-219.
    4. Cheng Yukun & Xu Zhiqi & Yao Shuangliang, 2021. "The Evolutionary Equilibrium of Block Withholding Attack," Journal of Systems Science and Information, De Gruyter, vol. 9(3), pages 266-279, June.
    5. Ahmad Firdaus & Mohd Faizal Ab Razak & Ali Feizollah & Ibrahim Abaker Targio Hashem & Mohamad Hazim & Nor Badrul Anuar, 2019. "The rise of “blockchain”: bibliometric analysis of blockchain study," Scientometrics, Springer;Akadémiai Kiadó, vol. 120(3), pages 1289-1331, September.

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