Smart Contracts for Bribing Miners
We present three smart contracts that allow a briber to fairly exchange bribes to miners who pursue a mining strategy benefiting the briber. The first contract, CensorshipCon , highlights that Ethereum’s uncle block reward policy can directly subsidise th
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Abstract. We present three smart contracts that allow a briber to fairly exchange bribes to miners who pursue a mining strategy benefiting the briber. The first contract, CensorshipCon, highlights that Ethereum’s uncle block reward policy can directly subsidise the cost of bribing miners. The second contract, HistoryRevisionCon, rewards miners via an in-band payment for reversing transactions or enforcing a new state of another contract. The third contract, GoldfingerCon, rewards miners in one cryptocurrency for reducing the utility of another cryptocurrency. This work is motivated by the need to understand the extent to which smart contracts can impact the incentive mechanisms involved in Nakamoto-style consensus protocols.
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Introduction
Cryptocurrencies such as Bitcoin and Ethereum have collectively achieved a market capitalisation of over $600 bn in January 2018. The success of cryptocurrencies relies on an append-only public ledger called the blockchain, and on Nakamoto consensus, a mechanism to reward honest participants (miners) for updating the blockchain. The consensus protocol is designed with the idea of “one-cpu-one-vote” as miners compete to solve a computationally difficult cryptographic puzzle. The first miner to present a valid solution wins the authority to append his block containing a list of recent transactions to the blockchain. Thus, the security and reliability of the blockchain is dependent on the assumption that a majority of the network’s computational power is honest. If not, an adversary is able to control the content of the blockchain. Since the introduction of Bitcoin in 2009, the mining process has changed drastically, with advances in graphic processing units (GPUs), fieldprogrammable gate arrays (FPGAs) and application-specific integrated circuits (ASICs) offering much greater performance than a single CPU. Thus, today’s miners must invest in expensive hardware before competing meaningfully in the consensus protocol. Similarly, pooled mining allows a single appointed pool master to decide which transactions to include in a block and how to distribute any earned block rewards amongst a co-operative group of miners. Solutions such as P2Pool [28] and SmartPool [14] allow an algorithm to play the role of the pool master, but have not yet gained widespread use. The combination of these two factors has undeniably led to a decrease in the number of participants in the consensus protocol underlying Bitcoin. In fact, a panel session at Scaling c International Financial Cryptography Association 2019 A. Zohar et al. (Eds.): FC 2018 Workshops, LNCS 10958, pp. 3–18, 2019. https://doi.org/10.1007/978-3-662-58820-8_1
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P. McCorry et al.
Bitcoin 2015 was made up of eight participants who together controlled 80% of the Bitcoin network’s computational power [20]. Whilst it is assumed that miners will honestly follow the consensus protocol, the assumption that the honest mining strategy is the most rewarding has been criticised. Eyal and Sirer [9] proposed selfish-mining strategies that can be deploye
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