Disincentivizing Double Spend Attacks Across Interoperable Blockchains

Abstract

Blockchain was originally developed to support decentralized cryptocurrency applications within a single network. However, the proliferation of blockchain technology has led to the need of supporting transactions across multiple networks requiring interoperability. Thus far, minimal analysis has been dedicated to the interoperability scenario and in particular the prevention of double-spending attacks across interoperable blockchain networks. In this paper, we propose the use of neutral observers to monitor transactions that span multiple blockchains and design a protocol that obviates the double-spending problem across interoperable blockchain networks. We show that the observers, can detect double spending, while remaining honest to the protocol as it is more profitable to them than colluding due to our proposed disincentivization scheme. Leveraging Ethereum's smart-contract functionality, we simulate our proposed disincentivization scheme and show its cost-effectiveness.