On Fairness in Committee-Based Blockchains

Committee-based blockchains are among the most popular alternatives of proof-of-work based blockchains, such as Bitcoin. They provide strong consistency (no fork) under classical assumptions, and avoid using energy-consuming mechanisms to add new blocks in the blockchain. For each block, these blockchains use a committee that executes Byzantine-fault tolerant distributed consensus to decide the next block they will add in the blockchain. Unlike Bitcoin, where there is only one creator per block, in committee-based blockchain any block is cooperatively created. In order to incentivize committee members to participate in the creation of new blocks, rewarding schemes have to be designed. In this paper, we study the fairness of rewarding in committee-based blockchains and we provide necessary and sufficient conditions on the system communication under which it is possible to have a fair reward mechanism

FairLedger: A Fair Blockchain Protocol for Financial Institutions

Financial institutions are currently looking into technologies for permissioned blockchains. A major effort in this direction is Hyperledger, an open source project hosted by the Linux Foundation and backed by a consortium of over a hundred companies. A key component in permissioned blockchain protocols is a byzantine fault tolerant (BFT) consensus engine that orders transactions. However, currently available BFT solutions in Hyperledger (as well as in the literature at large) are inadequate for financial settings; they are not designed to ensure fairness or to tolerate selfish behavior that arises when financial institutions strive to maximize their own profit. We present FairLedger, a permissioned blockchain BFT protocol, which is fair, designed to deal with rational behavior, and, no less important, easy to understand and implement. The secret sauce of our protocol is a new communication abstraction, called detectable all-to-all (DA2A), which allows us to detect participants (byzantine or rational) that deviate from the protocol, and punish them. We implement FairLedger in the Hyperledger open source project, using Iroha framework, one of the biggest projects therein. To evaluate FairLegder's performance, we also implement it in the PBFT framework and compare the two protocols. Our results show that in failure-free scenarios FairLedger achieves better throughput than both Iroha's implementation and PBFT in wide-area settings

LightChain: A DHT-based Blockchain for Resource Constrained Environments

As an append-only distributed database, blockchain is utilized in a vast variety of applications including the cryptocurrency and Internet-of-Things (IoT). The existing blockchain solutions have downsides in communication and storage efficiency, convergence to centralization, and consistency problems. In this paper, we propose LightChain, which is the first blockchain architecture that operates over a Distributed Hash Table (DHT) of participating peers. LightChain is a permissionless blockchain that provides addressable blocks and transactions within the network, which makes them efficiently accessible by all the peers. Each block and transaction is replicated within the DHT of peers and is retrieved in an on-demand manner. Hence, peers in LightChain are not required to retrieve or keep the entire blockchain. LightChain is fair as all of the participating peers have a uniform chance of being involved in the consensus regardless of their influence such as hashing power or stake. LightChain provides a deterministic fork-resolving strategy as well as a blacklisting mechanism, and it is secure against colluding adversarial peers attacking the availability and integrity of the system. We provide mathematical analysis and experimental results on scenarios involving 10K nodes to demonstrate the security and fairness of LightChain. As we experimentally show in this paper, compared to the mainstream blockchains like Bitcoin and Ethereum, LightChain requires around 66 times less per node storage, and is around 380 times faster on bootstrapping a new node to the system, while each LightChain node is rewarded equally likely for participating in the protocol

On the Use of Proof-of-Work in Permissioned Blockchains: Security and Fairness

In permissioned blockchains, a set of identifiable miners validates transactions and creates new blocks. In scholarship, the proposed solution for the consensus protocol is usually inspired by the Byzantine fault tolerance (BFT) based on voting rather than the proof-of-work (PoW). The advantage of PoW with respect to BFT is that it allows the final user to evaluate the cost required to change a confirmed transaction without the need to trust the consortium of miners. In this paper, we analyse the problems that arise from the application of PoW in permissioned blockchains. In standard PoW, it may be easy for colluded miners to temporarily reach 50% of the total hash power (HP). Moreover, since mining rewards are not usually expected in permissioned contexts, the problem of balancing the computational efforts among the miners becomes crucial. We propose a solution based on a sliding window algorithm to address these problems and analyse its effectiveness in terms of fairness and security. Furthermore, we present a quantitative, analytical model in order to assess its capacity to balance the hash power provided by heterogeneous miners. Our study considers the trade-off between the need to trust the entire consortium of miners guaranteed by the global HP invested by the mining process and the need to prevent collusion among malicious miners aimed at reaching 50% of the total HP. As a result, the model can be used to find the optimal parameters for the sliding window protocol

Correctness of Tendermint-Core Blockchains

Tendermint-core blockchains (e.g. Cosmos) are considered today one of the most viable alternatives for the highly energy consuming proof-of-work blockchains such as Bitcoin and Ethereum. Their particularity is that they aim at offering strong consistency (no forks) in an open system combining two ingredients (i) a set of validators that generate blocks via a variant of Practical Byzantine Fault Tolerant (PBFT) consensus protocol and (ii) a selection strategy that dynamically selects nodes to be validators for the next block via a proof-of-stake mechanism. The exact assumptions on the system model under which Tendermint underlying algorithms are correct and the exact properties Tendermint verifies, however, have never been formally analyzed. The contribution of this paper is as follows. First, while formalizing Tendermint algorithms we precisely characterize the system model and the exact problem solved by Tendermint, then, we prove that in eventual synchronous systems a modified version of Tendermint solves (i) under additional assumptions, a variant of one-shot consensus for the validation of one single block and (ii) a variant of the repeated consensus problem for multiple blocks. These results hold even if the set of validators is hit by Byzantine failures, provided that for each one-shot consensus instance less than one third of the validators is Byzantine

Mine, Yours, … Ours? Managing Stakeholder Conflicts in an Enterprise Blockchain Consortium

When major corporations build and manage own platforms, most of the conflicts are resolved internally. With the rise of blockchain systems, also blockchain-based platforms are increasingly tried out, which are governed in a decentralized fashion. But moving from hierarchical efficiency to a democratic inclusiveness, in which blockchain proponents believe, is difficult: the variety of included actors raise a variety of conflicts, when platform users become platform complementors or even owners. To manage these conflicts, it is necessary to analyze each actor in detail. This paper reflects on the developments within an ongoing enterprise blockchain consortium in a small European country in the automotive domain from a governance perspective. We portray the consortium’s stakeholder conflicts, propose solutions for these conflicts and relate them to literature on blockchain governance. Our findings contextualize several theoretical stances, emphasizing the importance of the organizational over the technological embedment in blockchain governance

Threshold Encrypted Mempools: Limitations and Considerations

Encrypted mempools are a class of solutions aimed at preventing or reducing negative externalities of MEV extraction using cryptographic privacy. Mempool encryption aims to hide information related to pending transactions until a block including the transactions is committed, targeting the prevention of frontrunning and similar behaviour. Among the various methods of encryption, threshold schemes are particularly interesting for the design of MEV mitigation mechanisms, as their distributed nature and minimal hardware requirements harmonize with a broader goal of decentralization. This work looks beyond the formal and technical cryptographic aspects of threshold encryption schemes to focus on the market and incentive implications of implementing encrypted mempools as MEV mitigation techniques. In particular, this paper argues that the deployment of such protocols without proper consideration and understanding of market impact invites several undesired outcomes, with the ultimate goal of stimulating further analysis of this class of solutions outside of pure cryptograhic considerations. Included in the paper is an overview of a series of problems, various candidate solutions in the form of mempool encryption techniques with a focus on threshold encryption, potential drawbacks to these solutions, and Osmosis as a case study. The paper targets a broad audience and remains agnostic to blockchain design where possible while drawing from mostly financial examples

Using Blockchain Technology for The Organ Procurement and Transplant Network

The organ donation system in the United States is centralized and difficult to audit by the general public. This centralized approach may lead to data integrity issues in the future. The Organ Procurement and Transplant Network (OPTN) was built and maintained by a non-governmental organization called the United Network for Organ Sharing (UNOS) under its proprietary UNet(SM) umbrella platform. This platform is made up of proprietary closed source software and does not provide the general public easy access to the organ transplant data for auditing. This study investigates the feasibility, challenges, and advantages of a blockchain-based OPTN. A prototype of a blockchain-based OPTN was created using the Hyperledger Fabric framework. The policies and guidelines issued by the United States Department of Health and Human Services for UNOS and the OPTN were used as the basis of this prototype. Four factors were identified to have a direct effect on the performance of this system, viz. max batch time out, max block size, endorsement policy, and transaction rate. Additionally, two variants of the blockchain chaincode were also developed. The first variant performed the organ-candidate matching inside the blockchain (Scheme A), and the second variant performed it outside the blockchain (Scheme B). Analysis of these data showed that Scheme A outperformed Scheme B in all experiments for write-operations. However, the read operations remained unaffected by any of the experiment variables in the given environment. Based on these results, it is recommended to perform the organ-candidate matching on the blockchain with the max batch time out close to the transaction rate