A Formal Analysis of the Bitcoin Protocol

none2noWe study Nakamoto’s Bitcoin protocol that implements a distributed ledger on peer-to-peer asynchronous networks. In particular, we define a principled formal model of key participants - the miners - as stochastic processes and describe the whole system as a parallel composition of miners. We therefore compute the probability that ledgers turn into a state with more severe inconsistencies, e.g. with longer forks, under the assumptions that messages are not lost and nodes are not hostile. We also study how the presence of hostile nodes mining blocks in wrong positions impacts on the consistency of the ledgers. Our theoretical results agree with the simulations performed on a probabilistic model checker that we extended with dynamic datatypes in order to have a faithful description of miners' behaviour.openAdele Veschetti, Cosimo LaneveAdele Veschetti, Cosimo Lanev

Stochastic modeling and analysis of the bitcoin protocol in the presence of block communication delays

International audienceWe analyze the protocol of the Bitcoin blockchain by using the PRISM probabilistic model checker. In particular, we (i) extend PRISM with the ledger data type, (ii) model the behaviour of the key participants in the protocol-the miners-and (iii) describe the whole protocol as a parallel composition of processes. The probabilistic analysis of the model highlights how forks happen and how they depend on specific parameters of the protocol, such as the difficulty of the cryptopuzzle and the network communication delays. Our results confirm that considering transactions in blocks at depth larger than 5 as permanent is reasonable because the majority of miners have consistent blockchains up-to that depth with probability of almost 1. We also study the behaviour of networks with churn miners, which may leave the network and rejoin afterwards, and with different topologies

Enabling interoperable distributed ledger technology with legacy platforms for enterprise digitalization

Presently to achieve enterprise digitalization technologies such as Distributed Ledger Technologies (DLT) has now been deployed to support digital services provided by enterprises. But several challenges in DLTs remain to be addressed, including the interoperability, standardization, and integration. Therefore, this study provides theoretical and practical understanding of DLT interoperability and identified the factors that influence the interoperability of DLTs. Also, an architecture is designed to shows how interoperability can be achieved in DLTs and legacy systems supported by Application Programming Interface (API). A case study is presented to illustrate the applicability of the architecture to support a digital energy marketplace.acceptedVersio

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

A Block-Free Distributed Ledger for P2P Energy Trading:Case with IOTA?

& #x00A9; 2019, Springer Nature Switzerland AG. Across the world, the organisation and operation of the electricity markets is quickly changing, moving towards decentralised, distributed, renewables-based generation with real-time data exchange-based solutions. In order to support this change, blockchain-based distributed ledgers have been proposed for implementation of peer-to-peer energy trading platform. However, blockchain solutions suffer from scalability problems as well as from delays in transaction confirmation. This paper explores the feasibility of using IOTA’s DAG-based block-free distributed ledger for implementation of energy trading platforms. Our agent-based simulation research demonstrates that an IOTA-like DAG-based solution could overcome the constraints that blockchains face in the energy market. However, to be usable for peer-to-peer energy trading, even DAG-based platforms need to consider specificities of energy trading markets (such as structured trading periods and assured confirmation of transactions for every completed period)