Silent Timestamping for Blockchain Mining Pool Security

Abstract

Blockchain miners processing the transactions and generating blocks are rational and incentivized by financial rewards. Prior research in blockchain security studied such financial incentives for the miners and identified attacks based on withholding and delaying block submissions. Among such attacks, the fork-after-withholding (FAW) attack is the state of the art and provides practical incentives to the rational attacker by increasing its reward at the expense of the rest of the miners in the compromised pool. To defend against FAW attack, we propose Silent Timestamping, which has the mining pool manager enforce the ordering of the shares. Implemented at the mining pool manager, Silent Timestamping does not require networking nor any behavior-or implementation-changes in the miners; the lack of the implementation overheads distinguish Silent Timestamping from other schemes which have been proposed but had limited success in practice. We analyze the optimal attacker behavior against Silent Timestamping and the effectiveness of Silent Timestamping against FAW attack. Silent Timestamping effectively nullifies the reward gain of the FAW attack and reduces the optimal FAW attacker strategy to be either the suboptimal block-withholding attack (which never submits the withheld block in the compromised pool and provides limited incentives for a rational attacker) or honest mining.