When bitcoin mining pools run dry: A game-theoretic analysis of the long-term impact of attacks between mining pools

Aron Laszka; Benjamin Johnson; Jens Grossklags

doi:10.1007/978-3-662-48051-9_5

When bitcoin mining pools run dry: A game-theoretic analysis of the long-term impact of attacks between mining pools

Aron Laszka, Benjamin Johnson, Jens Grossklags

Research output: Chapter in Book/Report/Conference proceeding › Conference contribution › peer-review

64 Scopus citations

Abstract

Bitcoin has established itself as the most successful cryptocurrency with adoption seen in many commercial scenarios. While most stakeholders have jointly benefited from the growing importance of Bitcoin, conflicting interests continue to negatively impact the ecosystem. In particular, incentives to derive short-term profits from attacks on mining pools threaten the long-term viability of Bitcoin. We develop a game-theoretic model that allows us to capture short-term as well as long-term impacts of attacks against mining pools. Using this model, we study the conditions under which the mining pools have no incentives to launch attacks against each other (i.e., peaceful equilibria), and the conditions under which one mining pool is marginalized by attacks (i.e., one-sided attack equilibria). Our results provide guidelines for ensuring that the Bitcoin ecosystem remains long-term viable and trustworthy.

Original language	English
Title of host publication	Financial Cryptography and Data Security - FC 2015 International Workshops BITCOIN, WAHC, and Wearable, Revised Selected Papers
Editors	Nicolas Christin, Kurt Rohloff, Michael Brenner, Nicolas Christin, Michael Brenner, Benjamin Johnson, Benjamin Johnson, Kurt Rohloff
Publisher	Springer Verlag
Pages	63-77
Number of pages	15
ISBN (Print)	9783662480502, 9783662480502
DOIs	https://doi.org/10.1007/978-3-662-48051-9_5
State	Published - 2015
Externally published	Yes
Event	International Conference on Financial Cryptography and Data Security, FC 2015 2nd Workshop on Bitcoin Research BITCOIN 2015, 3rd Workshop on Encrypted Computing and Applied Homomorphic Cryptography, WAHC 2015, and 1st Workshop on Wearable Security and Privacy, Wearable 2015 - San Juan, Puerto Rico Duration: 30 Jan 2015 → 30 Jan 2015

Publication series

Name	Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)
Volume	8976
ISSN (Print)	0302-9743
ISSN (Electronic)	1611-3349

Conference

Conference	International Conference on Financial Cryptography and Data Security, FC 2015 2nd Workshop on Bitcoin Research BITCOIN 2015, 3rd Workshop on Encrypted Computing and Applied Homomorphic Cryptography, WAHC 2015, and 1st Workshop on Wearable Security and Privacy, Wearable 2015
Country/Territory	Puerto Rico
City	San Juan
Period	30/01/15 → 30/01/15

Keywords

Attacks
Bitcoin
DDoS
Game theory
Mining

Access to Document

10.1007/978-3-662-48051-9_5

Cite this

Laszka, A., Johnson, B., & Grossklags, J. (2015). When bitcoin mining pools run dry: A game-theoretic analysis of the long-term impact of attacks between mining pools. In N. Christin, K. Rohloff, M. Brenner, N. Christin, M. Brenner, B. Johnson, B. Johnson, & K. Rohloff (Eds.), Financial Cryptography and Data Security - FC 2015 International Workshops BITCOIN, WAHC, and Wearable, Revised Selected Papers (pp. 63-77). (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics); Vol. 8976). Springer Verlag. https://doi.org/10.1007/978-3-662-48051-9_5

Laszka, Aron ; Johnson, Benjamin ; Grossklags, Jens. / When bitcoin mining pools run dry : A game-theoretic analysis of the long-term impact of attacks between mining pools. Financial Cryptography and Data Security - FC 2015 International Workshops BITCOIN, WAHC, and Wearable, Revised Selected Papers. editor / Nicolas Christin ; Kurt Rohloff ; Michael Brenner ; Nicolas Christin ; Michael Brenner ; Benjamin Johnson ; Benjamin Johnson ; Kurt Rohloff. Springer Verlag, 2015. pp. 63-77 (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)).

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title = "When bitcoin mining pools run dry: A game-theoretic analysis of the long-term impact of attacks between mining pools",

abstract = "Bitcoin has established itself as the most successful cryptocurrency with adoption seen in many commercial scenarios. While most stakeholders have jointly benefited from the growing importance of Bitcoin, conflicting interests continue to negatively impact the ecosystem. In particular, incentives to derive short-term profits from attacks on mining pools threaten the long-term viability of Bitcoin. We develop a game-theoretic model that allows us to capture short-term as well as long-term impacts of attacks against mining pools. Using this model, we study the conditions under which the mining pools have no incentives to launch attacks against each other (i.e., peaceful equilibria), and the conditions under which one mining pool is marginalized by attacks (i.e., one-sided attack equilibria). Our results provide guidelines for ensuring that the Bitcoin ecosystem remains long-term viable and trustworthy.",

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author = "Aron Laszka and Benjamin Johnson and Jens Grossklags",

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Laszka, A, Johnson, B & Grossklags, J 2015, When bitcoin mining pools run dry: A game-theoretic analysis of the long-term impact of attacks between mining pools. in N Christin, K Rohloff, M Brenner, N Christin, M Brenner, B Johnson, B Johnson & K Rohloff (eds), Financial Cryptography and Data Security - FC 2015 International Workshops BITCOIN, WAHC, and Wearable, Revised Selected Papers. Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics), vol. 8976, Springer Verlag, pp. 63-77, International Conference on Financial Cryptography and Data Security, FC 2015 2nd Workshop on Bitcoin Research BITCOIN 2015, 3rd Workshop on Encrypted Computing and Applied Homomorphic Cryptography, WAHC 2015, and 1st Workshop on Wearable Security and Privacy, Wearable 2015, San Juan, Puerto Rico, 30/01/15. https://doi.org/10.1007/978-3-662-48051-9_5

When bitcoin mining pools run dry: A game-theoretic analysis of the long-term impact of attacks between mining pools. / Laszka, Aron; Johnson, Benjamin; Grossklags, Jens.
Financial Cryptography and Data Security - FC 2015 International Workshops BITCOIN, WAHC, and Wearable, Revised Selected Papers. ed. / Nicolas Christin; Kurt Rohloff; Michael Brenner; Nicolas Christin; Michael Brenner; Benjamin Johnson; Benjamin Johnson; Kurt Rohloff. Springer Verlag, 2015. p. 63-77 (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics); Vol. 8976).

Research output: Chapter in Book/Report/Conference proceeding › Conference contribution › peer-review

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AB - Bitcoin has established itself as the most successful cryptocurrency with adoption seen in many commercial scenarios. While most stakeholders have jointly benefited from the growing importance of Bitcoin, conflicting interests continue to negatively impact the ecosystem. In particular, incentives to derive short-term profits from attacks on mining pools threaten the long-term viability of Bitcoin. We develop a game-theoretic model that allows us to capture short-term as well as long-term impacts of attacks against mining pools. Using this model, we study the conditions under which the mining pools have no incentives to launch attacks against each other (i.e., peaceful equilibria), and the conditions under which one mining pool is marginalized by attacks (i.e., one-sided attack equilibria). Our results provide guidelines for ensuring that the Bitcoin ecosystem remains long-term viable and trustworthy.

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Laszka A, Johnson B, Grossklags J. When bitcoin mining pools run dry: A game-theoretic analysis of the long-term impact of attacks between mining pools. In Christin N, Rohloff K, Brenner M, Christin N, Brenner M, Johnson B, Johnson B, Rohloff K, editors, Financial Cryptography and Data Security - FC 2015 International Workshops BITCOIN, WAHC, and Wearable, Revised Selected Papers. Springer Verlag. 2015. p. 63-77. (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)). doi: 10.1007/978-3-662-48051-9_5

When bitcoin mining pools run dry: A game-theoretic analysis of the long-term impact of attacks between mining pools

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