Security Analysis of Block Withholding Attacks in Blockchain

Abstract

Blockchain technology has gained growing popularity in recent years. While the technology works well for most applications, the vulnerability of the blockchain-based system is not well understood. The core part of a blockchain-based system is the consensus algorithm. It can be regarded as a protocol used by all network users to make decisions on the growth of the chain. Malicious users can exploit the vulnerabilities of the consensus algorithm to launch block withholding attacks to earn more profit by increasing their winning possibilities, which are significant threats to the security of blockchain-based applications. In this paper, we describe some scenarios of block withholding attacks and suggest effective mitigation methods accordingly. We propose two hybrid consensus algorithms against the block withholding attacks and evaluate the effectiveness of these algorithms, both analytically and through simulation. Simulation results from the SimBlock simulator verified the effectiveness of the proposed algorithms.