RIM: A Reputation-Based Incentive Mechanism using Blockchain

Abstract

Blockchain is secure, decentralized, and immune to attackers because of digital encryption without any trusted third party. In blockchain, list of transactions are recorded into a block, which is added to the blockchain ledger is known as mining. In mining process miners are involved in block validation and add new block to the existing blockchain. Miners crypto currencies stored in a mining pool, in public blockchain, mining pool is access by all the users in the network, which makes mining pool vulnerable to block with holding attack. This attack is done by malicious miner in order to either earning higher amount of incentive or waste honest miner computation power. To solve this issue, we propose Reputation-based Incentive Mechanism (RIM) based on Proof-of-Improved (PoIP) consensus process, which is implemented using blockchain technology. RIM provides a high incentive for legitimate miner and punishes the withholding-based irrelevant miner. The simulation results showed that proposed approach can discover the optimal option for distributing incentive and computing power for each mining pool, as well as punishing block withholding attackers.