Cryptology ePrint Archive: Report 2019/070

Uncle Traps: Harvesting Rewards in a Queue-based Ethereum Mining Pool

Sam M. Werner and Paul J. Pritz and Alexei Zamyatin and William J. Knottenbelt

Abstract: Mining pools in Proof-of-Work cryptocurrencies allow miners to pool their computational resources as a means of reducing payout variance. In Ethereum, uncle blocks are valid Proof-of-Work solutions which do not become the head of the blockchain, yet yield rewards if later referenced by main chain blocks. Mining pool operators are faced with the non-trivial task of fairly distributing rewards for both block types among pool participants. Inspired by empirical observations, we formally reconstruct a Sybil attack exploiting the uncle block distribution policy in a queue-based mining pool. To ensure fairness of the queue-based payout scheme, we propose a mitigation. We examine the effectiveness of the attack strategy under the current and the proposed policy via a discrete-event simulation. Our findings show that the observed attack can indeed be obviated by altering the current reward scheme.

Category / Keywords: cryptographic protocols / queue-based mining pools, ethereum, uncle blocks, sybil attack

Original Publication (in the same form): In Proc. 12th EAI International Conference on Performance Evaluation Methodologies and Tools (VALUETOOLS), 2019

Date: received 21 Jan 2019

Contact author: smw16 at ic ac uk

Available format(s): PDF | BibTeX Citation

Version: 20190125:220751 (All versions of this report)

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