Can Blockchain be Trusted in Industry 4.0? Study of a Novel Misleading Attack on Bitcoin

Abstract

After Bitcoin’s emergence, blockchain found its way to many industries, including Fintech, energy, and manufacturing. Blockchains consensus algorithms, like Nakamoto’s, are mechanisms to probabilistically guarantee that a transaction is not undone after confirmation. This mechanism requires that no one’s computational power exceeds 50% of the network power. However, recent attacks on blockchains have raised serious questions about their security and whether they can be trusted to be employed in critical infrastructure and Industry 4.0. In this article, we introduce a new category of blockchain attacks which we call “misleading-attacks.” In this type of attack, a fraction of network power is misled so that the attacker reaches her goal. The technique is most effective when miners are rational and algorithm-oriented, similar to machines/agents in future Industry 4.0 or industrial Internet of Things. Moreover, this technique has the potential to be used in inventing new attacks, or can be used in combination with other known attacks. We first analyze a case in which the attacker uses misleading techniques to prevent her newly mined block from becoming orphaned. We show that the proposed technique can push the attack success probability up by 16.42%. In a case study, we demonstrate how the technique promotes the success rate from 29.02% to 45.44%. Initiating the attack will be profitable if the attacker’s power is more than 24% of the network power. By combining this novel technique with bribery attack, we show how the cost ofguaranteed variable-rate bribing with commitmentstrategy can be drastically reduced.