Paper 2015/518

Broadcasting Intermediate Blocks as a Defense Mechanism Against Selfish-Mine in Bitcoin

Ren Zhang and Bart Preneel

Abstract

Although adopted by many cryptocurrencies, the Bitcoin mining protocol is not incentive-compatible, as the selfish mining strategy enables a miner to gain unfair mining rewards. Existing defenses either demand fundamental changes to block validity rules or have little effect on an attacker with more than one third of the total mining power. This paper proposes an effective defense mechanism against resourceful selfish miners. Our defense requires miners to publish intermediate blocks, the by-products of the mining process, then build on each other's work. By adding transparency to the mining process, block forks are resolved by comparing the amount of work of each branch. Moreover, this mechanism has the advantages of backward compatibility, low communication and computational costs, accelerating block propagation, and mitigating double-spending attacks on fast payments. To evaluate our design, we computed the most profitable mining strategy within our defense with analysis and simulation. Our simulation showed that within our defense, a selfish miner with almost half of the total mining power can only gain marginal unfair block rewards.

Note: In this version, we discuss how can a selfish miner adapt to our defense, and use simulation to evaluate the performance of our defense mechanism.