Smart contracts for bribing miners

We present three smart contracts that allow a briber to fairly exchange bribes to miners who pursue a mining strategy benefiting the briber. The first contract, CensorshipCon, highlights that Ethereum’s uncle block reward policy can directly subsidise the cost of bribing miners. The second contract, HistoryRevisionCon, rewards miners via an in-band payment for reversing transactions or enforcing a new state of another contract. The third contract, GoldfingerCon, rewards miners in one cryptocurrency for reducing the utility of another cryptocurrency. This work is motivated by the need to understand the extent to which smart contracts can impact the incentive mechanisms involved in Nakamoto-style consensus protocols

Bribes to Miners: Evidence from Ethereum

Though blockchain aims to alleviate bribing attacks, users can collude with miners by directly sending bribes. This paper focuses on empirical evidence of bribes to miners, and the detected behaviour implies that mining power could be exploited. By scanning transactions on Ethereum, transactions for potential direct bribes are filtered, and we find that the potential bribers and bribees are centralized in a small group. After constructing proxies of active level of potential bribing, we find that potential bribes can affect the status of Ethereum and other mainstream blockchains, and network adoption of blockchain can be influenced as well. Besides, direct bribes can be related to stock markets, e.g., S&P 500 and Nasdaq

Pay To Win: Cheap, Crowdfundable, Cross-chain Algorithmic Incentive Manipulation Attacks on PoW Cryptocurrencies

In this paper we extend the attack landscape of bribing attacks on cryptocurrencies by presenting a new method, which we call Pay-To-Win (P2W). To the best of our knowledge, it is the first approach capable of facilitating double-spend collusion across different blockchains. Moreover, our technique can also be used to specifically incentivize transaction exclusion or (re)ordering. For our construction we rely on smart contracts to render the payment and receipt of bribes trustless for the briber as well as the bribee. Attacks using our approach are operated and financed out-of-band i.e., on a funding cryptocurrency, while the consequences are induced in a different target cryptocurrency. Hereby, the main requirement is that smart contracts on the funding cryptocurrency are able to verify consensus rules of the target. For a concrete instantiation of our P2W method, we choose Bitcoin as a target and Ethereum as a funding cryptocurrency. Our P2W method is designed in a way that reimburses collaborators even in the case of an unsuccessful attack. Interestingly, this actually renders our approach approximately one order of magnitude cheaper than comparable bribing techniques (e.g., the whale attack). We demonstrate the technical feasibility of P2W attacks through publishing all relevant artifacts of this paper, ranging from calculations of success probabilities to a fully functional proof-of-concept implementation, consisting of an Ethereum smart contract and a Python client

Timelocked Bribing

A Hashed Time Lock Contract (HTLC) is a central concept in cryptocurrencies where some value can be spent either with the preimage of a public hash by one party (Bob) or after a timelock expires by another party (Alice). We present a bribery attack on HTLC\u27s where Bob\u27s hash-protected transaction is censored by Alice\u27s timelocked transaction. Alice incentivizes miners to censor Bob\u27s transaction by leaving almost all her value to miners in general. Miners follow (or refuse) this bribe if their expected payoff is better (or worse). We explore conditions under which this attack is possible, and how HTLC participants can protect themselves against the attack. Applications like Lightning Network payment channels and Cross-Chain Atomic Swaps use HTLC\u27s as building blocks and are vulnerable to this attack. Our proposed solution uses the hashpower share of the weakest known miner to derive parameters that make these applications robust against this bribing attack

SoK: Algorithmic Incentive Manipulation Attacks on Permissionless PoW Cryptocurrencies

A long standing question in the context of cryptocurrencies based on Nakamoto consensus is whether such constructions are incentive compatible, i.e., the intended properties of the system emerge from the appropriate utility model for participants. Bribing and other related attacks, such as front-running or Goldfinger attacks, aim to directly influence the incentives of actors within (or outside) of the targeted cryptocurrency system. The theoretical possibility of bribing at tacks on cryptocurrencies was discussed early on in the cryptocurrency community and various different techniques and approaches have since been proposed. Some of these attacks are designed to gain in-band profits, while others intend to break the mechanism design and render the cryptocurrency worthless. In this paper, we systematically expose the large but scattered body of research in this area which has accumulated over the years. We summarize these bribing attacks and similar techniques that leverage on programmatic execution and verification under the term algorithmic incentive manipulation (AIM) attacks, and show that the problem space is not yet fully explored. Based on our analysis we present several research gaps and opportunities that warrant further investigation. In particular, we highlight no- and near-fork attacks as a powerful, yet largely underestimated, AIM category that raises serious security concerns not only for smart contract platforms

Impact of Geo-distribution and Mining Pools on Blockchains: A Study of Ethereum

Given the large adoption and economical impact of permissionless blockchains, the complexity of the underlying systems and the adversarial environment in which they operate, it is fundamental to properly study and understand the emergent behavior and properties of these systems. We describe our experience on a detailed, one-month study of the Ethereum network from several geographically dispersed observation points. We leverage multiple geographic vantage points to assess the key pillars of Ethereum, namely geographical dispersion, network efficiency, blockchain efficiency and security, and the impact of mining pools. Among other new findings, we identify previously undocumented forms of selfish behavior and show that the prevalence of powerful mining pools exacerbates the geographical impact on block propagation delays. Furthermore, we provide a set of open measurement and processing tools, as well as the data set of the collected measurements, in order to promote further research on understanding permissionless blockchains.Comment: To appear in 50th IEEE/IFIP International Conference on Dependable Systems and Networks (DSN), 202