Abstract
The Bitcoin cryptocurrency introduced a novel distributed consensus mechanism relying on economic incentives. While a coalition controlling a majority of computational power may undermine the system, for example by double-spending funds, it is often assumed it would be incentivized not to attack to protect its long-term stake in the health of the currency. We show how an attacker might purchase mining power (perhaps at a cost premium) for a short duration via bribery. Indeed, bribery can even be performed in-band with the system itself enforcing the bribe. A bribing attacker would not have the same concerns about the long-term health of the system, as their majority control is inherently short-lived. New modeling assumptions are needed to explain why such attacks have not been observed in practice. The need for all miners to avoid short-term profits by accepting bribes further suggests a potential tragedy of the commons which has not yet been analyzed.
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- 1.
Bitcoin’s mining puzzle is not a strict proof-of-work scheme but a probabilistic one.
- 2.
- 3.
If the attacker’s attempt to introduce a fork fails and another block is found on the main chain, they can move the funds from address \(K_1\) again. By cycling these funds every block they can ensure their fork is arbitrarily close to the longest chain.
- 4.
This script would be achieved using a single OP_CHECK_LOCK_TIME_VERIFY command, which has been standard in Bitcoin since mid-2015.
- 5.
As mentioned in Sect. 2.3, bribers placed in band will not be at risk if the attack fails, though this method may be the most difficult to execute.
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© 2016 International Financial Cryptography Association
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Bonneau, J. (2016). Why Buy When You Can Rent?. In: Clark, J., Meiklejohn, S., Ryan, P., Wallach, D., Brenner, M., Rohloff, K. (eds) Financial Cryptography and Data Security. FC 2016. Lecture Notes in Computer Science(), vol 9604. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-53357-4_2
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DOI: https://doi.org/10.1007/978-3-662-53357-4_2
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