Bitcoin is a "crypto currency", a decentralized electronic payment scheme based on cryptography. Bitcoin economy grows at an incredibly fast rate and is now worth some 10 billions of dollars. Bitcoin mining is an activity which consists of creating (minting) the new coins which are later put into circulation. Miners spend electricity on solving cryptographic puzzles and they are also gatekeepers which validate bitcoin transactions of other people. Miners are expected to be honest and have some incentives to behave well. However. In this paper we look at the miner strategies with particular attention paid to subversive and dishonest strategies or those which could put bitcoin and its reputation in danger. We study in details several recent attacks in which dishonest miners obtain a higher reward than their relative contribution to the network. In particular we revisit the concept of block withholding attacks and propose a new concrete and practical block withholding attack which we show to maximize the advantage gained by rogue miners.
RECENT EVENTS: it seems that the attack was recently executed, see Section XI-A.
[1]
A. R. Crathorne.
The Law of Small Numbers
,
1928,
Numerology or What Pythagoras Wrought.
[2]
Adam Back,et al.
Hashcash - A Denial of Service Counter-Measure
,
2002
.
[3]
S. Nakamoto,et al.
Bitcoin: A Peer-to-Peer Electronic Cash System
,
2008
.
[4]
Meni Rosenfeld,et al.
Analysis of Bitcoin Pooled Mining Reward Systems
,
2011,
ArXiv.
[5]
Elaine Shi,et al.
Bitter to Better - How to Make Bitcoin a Better Currency
,
2012,
Financial Cryptography.
[6]
Christian Decker,et al.
Information propagation in the Bitcoin network
,
2013,
IEEE P2P 2013 Proceedings.
[7]
Lear Bahack,et al.
Theoretical Bitcoin Attacks with less than Half of the Computational Power (draft)
,
2013,
IACR Cryptol. ePrint Arch..
[8]
Nicolas Courtois,et al.
The Unreasonable Fundamental Incertitudes Behind Bitcoin Mining
,
2013,
ArXiv.
[9]
Emin Gün Sirer,et al.
Majority Is Not Enough: Bitcoin Mining Is Vulnerable
,
2013,
Financial Cryptography.