Just Enough Security: Reducing Proof-of-Work Ecological Footprint

Proof-of-work (PoW) mechanisms secure about 80% of the $250B cryptocurrency market. PoW requires system participants to expend computational resources, and protects the system from attackers who cannot expend resources at an equivalent rate. These systems operate in the permissionless setting and compensate their users with cryptocurrency, having a monetary value. As cryptocurrency prices sore so do the invested resources, and Bitcoin expenditures alone are 0.24% of the global electricity consumption. Arguably, this is superfluous, and lowering the ecological footprint justifies settling for a lower attack threshold. We present novel protocols that allow the system designer to accurately trade off security for expenditure reduction. To the best of our knowledge, this is the first work to do so without adding qualitatively stronger model assumptions. Moreover, our protocols reduce PoW resource expenditure significantly, but with only limited security degradation. To analyze these protocols We refine the common blockchain model to take into account the cryptocurrency value in real terms, expenditure, and security metrics, distinguishing common revenue-seeking attacks from sabotage. Our analysis of game-theoretic and economical properties of the protocols can be used to tune blockchain security to its required level and limit its ecological damage.