Thursday, November 7, 2013

Bitcoin Mining is Vulnerable according to this Cornell paper

original Cornell article link:

From I-Programmer:
Written by Mike James   
Wednesday, 06 November 2013 08:00
original article link:

Now in a new paper, Ittay Eyal and Emin Gun Sirer of Cornell have noticed that there is a strategy whereby a group of miners can receive more Bitcoins if they work together.
Currently miners do organize themselves into pools but these are more like betting syndicates. The miners simply agree to work together and share the Bitcoins that they earn. This smooths out the statistical fluctuations in a miner's earnings.
However, if any pool notices that there is an advantage to be had from deviating from the standard behavior then the system falls apart - and this is what the researchers have found. The profitable deviation isn't obvious, but it is easy to implement. When a miner finds the solution to a block the idea is that this is announced at once. This is noticed by the other miners who then move on to the next block and regard the previously current block as solved. Now consider what happens if a mining pool decides not to announce that it has solved a block. That pool is the only group of miners that knows to move on to the next block. The other, honest, miners waste their time trying to solve a block that has already been solved.

Ittay Eyal, Emin Gun Sirer

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