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Discouraging pool block withholding attacks in Bitcoin

Author

Listed:
  • Zhihuai Chen

    (Chinese Academy of Sciences (CAS)
    University of Chinese Academy of Sciences)

  • Bo Li

    (The Hong Kong Polytechnic University)

  • Xiaohan Shan

    (Tsinghua University)

  • Xiaoming Sun

    (Chinese Academy of Sciences (CAS)
    University of Chinese Academy of Sciences)

  • Jialin Zhang

    (Chinese Academy of Sciences (CAS)
    University of Chinese Academy of Sciences)

Abstract

The existence of mining pools in Bitcoin enables the miners to gain more stable reward. However, it is proved that the pools are vulnerable for security attacks. A strategic pool manager has strong incentive to launch pool block withholding attack by sending some of her miners to infiltrate the other pools. The infiltrating miners try to find (partial) proof-of-work solutions but discard the solution that can actually create blocks. As it is hard to recognize malicious miners,these miners still get reward in the infiltrated pools. In this work, we revisit the game-theoretic model for pool block withholding attacks and propose a revised approach to reallocate the reward to the miners. Instead of proportionally allocating the reward to all miners, a pool manager deducts a fraction from the reward to award the miner who actually mined the block. Accordingly, we prove that, under our scheme, for any number of mining pools, no-pool-attacks is always a Nash equilibrium. Moreover, with only two minority mining pools, no-pool-attacks is the unique Nash equilibrium

Suggested Citation

  • 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.
    • Handle: RePEc:spr:jcomop:v:43:y:2022:i:2:d:10.1007_s10878-021-00768-4
    DOI: 10.1007/s10878-021-00768-4
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    References listed on IDEAS

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    1. 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.
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