Agent-Based Simulations of Blockchain protocols illustrated via Kadena's Chainweb

While many distributed consensus protocols provide robust liveness and consistency guarantees under the presence of malicious actors, quantitative estimates of how economic incentives affect security are few and far between. In this paper, we describe a system for simulating how adversarial agents, both economically rational and Byzantine, interact with a blockchain protocol. This system provides statistical estimates for the economic difficulty of an attack and how the presence of certain actors influences protocol-level statistics, such as the expected time to regain liveness. This simulation system is influenced by the design of algorithmic trading and reinforcement learning systems that use explicit modeling of an agent's reward mechanism to evaluate and optimize a fully autonomous agent. We implement and apply this simulation framework to Kadena's Chainweb, a parallelized Proof-of-Work system, that contains complexity in how miner incentive compliance affects security and censorship resistance. We provide the first formal description of Chainweb that is in the literature and use this formal description to motivate our simulation design. Our simulation results include a phase transition in block height growth rate as a function of shard connectivity and empirical evidence that censorship in Chainweb is too costly for rational miners to engage in. We conclude with an outlook on how simulation can guide and optimize protocol development in a variety of contexts, including Proof-of-Stake parameter optimization and peer-to-peer networking design.Comment: 10 pages, 7 figures, accepted to the IEEE S&B 2019 conferenc

Account Management in Proof of Stake Ledgers

Blockchain protocols based on Proof-of-Stake (PoS) depend — by nature — on the active participation of stakeholders. If users are offline and abstain from the PoS consensus mechanism, the system’s security is at risk, so it is imperative to explore ways to both maximize the level of participation and minimize the effects of non-participation. One such option is stake representation, such that users can delegate their participation rights and, in the process, form stake pools . The core idea is that stake pool operators always participate on behalf of regular users, while the users retain the ownership of their assets. Our work provides a formal PoS wallet construction that enables delegation and stake pool formation. While investigating the construction of addresses in this setting, we distil and explore address malleability, a security property that captures the ability of an attacker to manipulate the delegation information associated with an address. Our analysis consists of identifying multiple levels of malleability, which are taken into account in our paper’s core result. We then introduce the first ideal functionality of a PoS wallet’s core which captures the PoS wallet’s capabilities and is realized as a secure protocol based on standard cryptographic primitives. Finally, we cover how to use the wallet core in conjunction with a PoS ledger, as well as investigate how delegation and stake pools affect a PoS system’s security