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Majority is not Enough: Bitcoin Mining is Vulnerable

Majority is not Enough: Bitcoin Mining is Vulnerable. Department of Computer Science, Cornell University. Ittay Eyal and Emin Gün Sirer. Presented By Ovia Seshadri, CSE IITD. The original version of this paper was Published in Financial Cryptography and Data Security (FC 2014).

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Majority is not Enough: Bitcoin Mining is Vulnerable

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  1. Majority is not Enough: Bitcoin Mining is Vulnerable Department of Computer Science, Cornell University Ittay Eyal and Emin Gün Sirer Presented By Ovia Seshadri, CSE IITD

  2. The original version of this paper was Published in Financial Cryptography and Data Security (FC 2014). • Lecture Notes in Computer Science 8437, Springer; https://link.springer.com/ chapter/10.1007/978-3-662-45472-5_28 • Laid foundations for the well known Selfish Mining Attack • Cited by 896 and counting • Gained popularity in all Financial markets and news

  3. Preliminaries • Blockchain, Bitcoin, • PoW, Hashing Power, Mining, Pools • Forks • Longest chain Rule, Majority, 51% attack • Block Rewards, Difficulty

  4. Discussion • An Honest majority is an important requirement!! • Miners are independent and self motivated • Best strategy must be to play honest • A Blockchain must be fair! Incentive – compatibility • Are pools a problem??

  5. Miner controls 25% he gets 1 block every 4 blocks

  6. Paper Contributions • Bitcoin Mining is not incentive Compatible • Incentive to form pools and strategy to benefit pools • Possibility of system collapse above a threshold • A possible solution to increase threshold.

  7. Selfish Mining • Selfish Mining outperforms honest mining • GOAL: Get more that fair share • HOW: Maintain secret blocks, publish judiciously • INTUITION: Risk some work, Others waste a lot more.

  8. Attacker tries to create as long a secret chain as possible Publish secret branch just before losing lead (assuming no latency)

  9. Risk - RACE Also Publish when the lead is lost!! Intentional public fork - RACE

  10. Markov Chain model

  11. Fraction of Attacker’s hash power - α

  12. System is partitioned at every arrival. The system grows at the same rate left to right or right to left. Pi – is the probability of being at ith state.

  13. Where 0<=α<=1/2

  14. Solution Discussion • System Collapse – Even attackers are invested in the coin • Altruistic Agents – moral nodes • Naïve Lines of Defense – police infiltration into selfish pools • Imminent Danger

  15. Thank You

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