[cryptography] Bitcoin attack

Karn Kallio tierpluspluslists at skami.org
Mon Nov 4 09:01:04 EST 2013

The paper "Majority is not Enough Bitcoin Mining is Vulnerable" may be of 


Abstract. The Bitcoin cryptocurrency records its transactions in a pub-
lic log called the blockchain. Its security rests critically on the 
protocol that maintains the blockchain, run by participants called miners.
Conventional wisdom asserts that the protocol is incentive-compatible
and secure against colluding minority groups, i.e., it incentivizes miners
to follow the protocol as prescribed.
We show that the Bitcoin protocol is not incentive-compatible. We
present an attack with which colluding miners obtain a revenue larger
than their fair share. This attack can have significant consequences for
Bitcoin: Rational miners will prefer to join the selfish miners, and the
colluding group will increase in size until it becomes a majority. At this
point, the Bitcoin system ceases to be a decentralized currency.
Selfish mining is feasible for any group size of colluding miners. We pro-
pose a practical modification to the Bitcoin protocol that protects against
selfish mining pools that command less than 1/4 of the resources. This
threshold is lower than the wrongly assumed 1/2 bound, but better than
the current reality where a group of any size can compromise the system.

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