Cryptology ePrint Archive: Report 2019/752

Fact and Fiction: Challenging the Honest Majority Assumption of Permissionless Blockchains

Runchao Han and Zhimei Sui and Jiangshan Yu and Joseph Liu and Shiping Chen

Abstract: Honest majority is the key security assumption of Proof-of-Work (PoW) based blockchains. However, the recent 51% attacks render this assumption unrealistic in practice. In this paper, we challenge this assumption against rational miners in the PoW-based blockchains in reality. In particular, we show that the current incentive mechanism may encourage rational miners to launch 51% attacks in two cases. In the first case, we consider a miner of a stronger blockchain launches 51% attacks on a weaker blockchain, where the two blockchains share the same mining algorithm. In the second case, we consider a miner rents mining power from cloud mining services to launch 51% attacks. As 51% attacks lead to double-spending, the miner can profit from these two attacks. If such double-spending is more profitable than mining, miners are more intended to launch 51% attacks rather than mine honestly. We formally model such behaviours as a series of actions through a Markov Decision Process. Our results show that, for most mainstream PoW-based blockchains, 51% attacks are feasible and profitable, so profit-driven miners are incentivised to launch 51% attacks to gain extra profit. In addition, we leverage our model to investigate the recent 51% attack on Ethereum Classic (on 07/01/2019), which is suspected to be an incident of 51% attacks. We provide insights on the attacker strategy and expected revenue, and show that the attacker’s strategy is near-optimal.

Category / Keywords: cryptographic protocols / Blockchain; Proof-of-Work; 51% Attacks

Original Publication (with minor differences): AsiaCCS'21

Date: received 25 Jun 2019, last revised 27 Feb 2021

Contact author: runchao han at monash edu, zhimei sui1 at monash edu, jiangshan yu at monash edu, joseph liu at monash edu, shiping chen at data61 csiro au

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Version: 20210228:031618 (All versions of this report)

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