A game theoretic analysis on block withholding attacks using the zero-determinant strategy

In Bitcoin's incentive system that supports open mining pools, block withholding attacks incur huge security threats. In this paper, we investigate the mutual attacks among pools as this determines the macroscopic utility of the whole distributed system. Existing studies on pools' interactive attacks usually employ the conventional game theory, where the strategies of the players are considered pure and equal, neglecting the existence of powerful strategies and the corresponding favorable game results. In this study, we take advantage of the Zero-Determinant (ZD) strategy to analyze the block withholding attack between any two pools, where the ZD adopter has the unilateral control on the expected payoffs of its opponent and itself. In this case, we are faced with the following questions: who can adopt the ZD strategy? individually or simultaneously? what can the ZD player achieve? In order to answer these questions, we derive the conditions under which two pools can individually or simultaneously employ the ZD strategy and demonstrate the effectiveness. To the best of our knowledge, we are the first to use the ZD strategy to analyze the block withholding attack among pools

Research on CRO's Dilemma In Sapiens Chain: A Game Theory Method

In recent years, blockchain-based techniques have been widely used in cybersecurity, owing to the decentralization, anonymity, credibility and not be tampered properties of the blockchain. As one of the decentralized framework, Sapiens Chain was proposed to protect cybersecurity by scheduling the computational resources dynamically, which were owned by Computational Resources Owners (CROs). However, when CROs in the same pool attack each other, all CROs will earn less. In this paper, we tackle the problem of prisoner's dilemma from the perspective of CROs. We first define a game that a CRO infiltrates another pool and perform an attack. In such game, the honest CRO can control the payoffs and increase its revenue. By simulating this game, we propose to apply Zero Determinant (ZD) strategy on strategy decision, which can be categorized into cooperation and defecting. Our experimental results demonstrate the effectiveness of the proposed strategy decision method

Redesigning Bitcoin's fee market

The security of the Bitcoin system is based on having a large amount of computational power in the hands of honest miners. Such miners are incentivized to join the system and validate transactions by the payments issued by the protocol to anyone who creates blocks. As new bitcoins creation rate decreases (halving every 4 years), the revenue derived from transaction fees start to have an increasingly important role. We argue that Bitcoin's current fee market does not extract revenue well when blocks are not congested. This effect has implications for the scalability debate: revenue from transaction fees may decrease if block size is increased. The current mechanism is a "pay your bid" auction in which included transactions pay the amount they suggested. We propose two alternative auction mechanisms: The Monopolistic Price Mechanism, and the Random Sampling Optimal Price Mechanism (due to Goldberg et al.). In the monopolistic price mechanism, the miner chooses the number of accepted transactions in the block, and all transactions pay exactly the smallest bid included in the block. The mechanism thus sets the block size dynamically (up to a bound required for fast block propagation and other security concerns). We show, using analysis and simulations, that this mechanism extracts revenue better from users, and that it is nearly incentive compatible: the profit due to strategic bidding relative to honest biding decreases as the number of bidders grows. Users can then simply set their bids truthfully to exactly the amount they are willing to pay to transact, and do not need to utilize fee estimate mechanisms, do not resort to bid shading and do not need to adjust transaction fees (via replace-by-fee mechanisms) if the mempool grows. We discuss these and other properties of our mechanisms, and explore various desired properties of fee market mechanisms for crypto-currencies

Blockchain systems, technologies and applications: a methodology perspective

In the past decade, blockchain has shown a promising vision to build trust without any powerful third party in a secure, decentralized and scalable manner. However, due to the wide application and future development from cryptocurrency to the Internet of things, blockchain is an extremely complex system enabling integration with mathematics, computer science, communication and network engineering, etc. By revealing the intrinsic relationship between blockchain and communication, networking and computing from a methodological perspective, it provided a view to the challenge that engineers, experts and researchers hardly fully understand the blockchain process in a systematic view from top to bottom. In this article we first introduce how blockchain works, the research activities and challenges, and illustrate the roadmap involving the classic methodologies with typical blockchain use cases and topics. Second, in blockchain systems, how to adopt stochastic process, game theory, optimization theory, and machine learning to study the blockchain running processes and design the blockchain protocols/algorithms are discussed in details. Moreover, the advantages and limitations using these methods are also summarized as the guide of future work to be further considered. Finally, some remaining problems from technical, commercial and political views are discussed as the open issues. The main findings of this article will provide a survey from a methodological perspective to study theoretical model for blockchain fundamentals understanding, design network service for blockchain-based mechanisms and algorithms, as well as apply blockchain for the Internet of things, etc

Turnout in Developing Countries: The Effect of Mass Media on National Voter Participation

Previous research on electoral participation has paid little attention to turnout in developing countries. Even more understudied is the effect of mass media, as the main source of political information, on voter turnout in new democracies. This paper argues that voter turnout patterns in developing countries can be explained by extending the traditional rational voter model to include recent developments of the information theory of turnout. Embedding limited information, our theoretical framework suggests that media access and freedom affect turnout. We test our predictions in a sample of 60 developing countries over the period 1980-2005. We find that media penetration, as measured by radio ownership, fosters turnout, whereas newspapers circulation and television ownership are not significant. In addition, we show that when government controls the content of news, citizens are less prone to express their views at the polls. Finally, we highlight specific factors -political violence and external debt- hat affect turnout in developing countries