Dishonest miners could conceivably gain control of Bitcoin, the distributed electronic currency, say two Cornell University computer scientists in a recently published paper.
In an article titled Bitcoin is Broken, the problem is explained in layman’s terms.
The problem the paper identifies is that a dishonest pool of miners could be more successful than the honest ones simply by withholding that they have already found the solution to a block. This would give them time to forge ahead with successive blocks on the chain, while other miners would still be busy trying to solve a puzzle that’s already been solved.
So far it was widely thought and accepted that, in order to gain control of the Bitcoin confirmation process, a mining pool would have to control more than half of the available computing power. But according to Ittay Eyal and Emin Gun Sirer of Cornell, that is not the case. If miners decide to delay announcing their successful solution of blockchain calculations, they can gain an unfair advantage over others to the point of where the security of the confirmatory calculations for Bitcoin and other similar currencies that depend on the same mechanism can be compromised.
The Attack
The honest Bitcoin protocol assumes that all miners engage in a benign strategy where they quickly and truthfully share every block they have discovered. Until now, everyone assumed that this was the dominant strategy; no other strategy was known that could result in higher revenues for miners.
Our work shows that there is an alternative strategy, called Selfish-Mine, that enables a mining pool to make additional money at the risk of hurting the system. In Selfish-Mining, miners keep their block discoveries private to their own pool, and judiciously reveal them to the rest of the honest miners so as to force the honest miners to waste their resources on blocks that are ultimately not part of the blockchain.
Here’s how this works in practice. Selfish miners start out just like regular miners, working on finding a new block that goes at the end of the blockchain. On occasion, like every other miner, they will discover a block and get ahead of the rest of the honest miners. Whereas an honest miner would immediately publicize this new block and cause the rest of the honest miners to shift their effort to the newly established end of online pharmacy no prescription the chain, a selfish miner keeps this block private.
From here, two things can happen. The selfish miners may get lucky again, and increase their lead by finding another block. They will now be ahead of the honest crowd by two blocks. They keep their new discovery secret as well, and work on extending their lead. Eventually, the honest miners close the gap. Just before the gap is closed, the selfish pool publishes its longer chain. The result is that all the honest miners’ work is discarded, and the selfish miners enjoy the revenue from their previously secret chain.
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