Does a Blockchain Need Altruism? Roger Wattenhofer ETH Zurich - PowerPoint PPT Presentation

Does a Blockchain Need Altruism? Roger Wattenhofer ETH Zurich – Distributed Computing Group

Do You Trust the Miners?

Modeling Distributed Systems A ltruistic R ational C rash B yzantine

Modeling Distributed Systems C rash R ational A ltruistic B yzantine Who are the Miners?

“The system is secure as long as honest nodes collectively control more CPU power than any cooperating group of attacker nodes.”

Mining is a Rational Business

Mining is a Rational Business

Selfish Mining Timeline 2009 2010 2013 2018

What is Selfish Mining Tx_0 Tx_0 Tx_1 Tx_1 … … Tx_0 Tx_0 Tx_0 Tx_0 Tx_1 Tx_1 Tx_1 Tx_1 … … … …

Simpler Analysis

Original Algorithm

Somewhat Simpler Algorithm

𝑒 𝑞 > 𝑒 𝑡 Tx_0 Tx_0 Tx_1 Tx_1 … …

Somewhat Simpler Algorithm

𝑒 𝑞 = 𝑒 𝑡 − 1 Tx_0 Tx_0 Tx_1 Tx_1 … … Tx_0 Tx_0 Tx_0 Tx_0 Tx_1 Tx_1 Tx_1 Tx_1 … … … …

Somewhat Simpler Algorithm

𝑒 𝑞 = 𝑒 𝑡 Tx_0 Tx_0 Tx_1 Tx_1 … … Tx_0 Tx_0 Tx_1 Tx_1 … …

State Machine (Original & Simpler) = 1 − 𝛽 𝛽 : probability that selfish miner finds a block

Stationary Distribution

Computation…

All 𝛾 Transitions 0 → 0 : Block for honest miners 𝑗 + 1 → 𝑗 : Block for selfish miner (for 𝑗 > 2 ) 2 → 0 : Two blocks for selfish miner 1 → 0 : Race who wins next block with probability 𝛽 two blocks for selfish miner with probability 𝛾(1 − 𝛿) two blocks for honest miners with probability 𝛾𝛿 one block each 𝛿 : probability that honest miners append block to selfish miner’s block (in race)

Ratio of Selfish Blocks in Chain 𝛿 : probability that honest miners append block to selfish miner’s block (in race)

Selfish Miner Share

Selfish Miner Share 𝛿 = 0 : break even at 𝛽 = 1/3 𝛿 = 0.5 : break even at 𝛽 = 1/4 𝛿 = 1 : break even at 𝛽 > 0

A Blockchain Without Altruism? [Joint Work with Jakub Sliwinski]

Simple Chains Are Too Simple

Better: Expose Competition

Our Rational Blockchain

Always Refer to All Childless Blocks

Only One Type of Reference (Heaviest Reference is Your “Parent”)

Block Ordering is Recursive 5 3 1 2 4 6

Incentives

Why Miners Should Always Refer to All Childless Blocks?

Because of our Block Rewards!

It’s Somewhat Complicated…

Motivating Block Rewards I Reward = 0.34 Reward = 0.71 Reward = 1 Reward = 1 Reward = 1 Reward = 0.71

Motivating Block Rewards II Reward = 0.72 Reward = 0.91 Reward = 0.45 Reward = 0.69

Our Solution

Block Penalty Example 1 1

Block Penalty Example 1 0.5 0.5

Block Penalty Example 1 1 1 0.66 0.66 0.5 0.5 0.66

The Penalty Algorithm

The Penalty Algorithm

The Penalty Algorithm 1 1 1 1 0.66 1 1 0 0.66 0.33 0.33 0.66 1 1 0.66 0.66

Transaction Fees

A  B fee = 10 A  B fee = 10

A  B A  B fee/2 = 5 fee/2 = 5

“The system is secure as long as rational honest nodes collectively control more CPU power than any cooperating group of attacker nodes.”

Thank You! Questions & Comments? Thanks to Jakub Sliwinski www.disco.ethz.ch