SKLCS Seminar by Jason Teutsch 　　

　　Title: When Cryptocurrencies Mine Their Own Business

　　Speaker: Jason Teutsch (National University of Singapore)

　　Time: 15:00, 8th October 2015

　　Venue: Seminar Room (334), Level 3, Building 5, Institute of Software, Chinese Academy of Sciences.

　　Abstract:

　　Bitcoin and hundreds of other cryptocurrencies employ a consensus protocol called Nakamoto consensus which reward miners for maintaining a public blockchain. In this paper, we study the security of this protocol with respect to rational miners and show how a minority of　the computation power can incentivize the rest of the network to　accept a blockchain of the minority's choice. By deviating from the　mining protocol, a mining pool which controls at least 38.2% of the　network's total computational power can, with modest financial　capacity, gain mining advantage over honest mining. Such an attack　creates a longer valid blockchain by forking the honest blockchain,　and the attacker's blockchain need not disrupt any “legitimate”　non-mining transactions present on the honest blockchain. By　subverting the consensus protocol, the attacking pool can double-spend　money or simply create a blockchain that pays mining rewards to the　attacker's pool. We show that our attacks are easy to encode in any　Nakamoto-consensus-based cryptocurrency which supports a scripting　language that is sufficiently expressive to encode its own mining　puzzles.