Securing Proof-of-Work Ledgers via Checkpointing

Our work explores mechanisms that secure a distributed ledger in the presence of adversarial mining majorities. Distributed ledgers based on the Proof-of-Work (PoW) paradigm are typically most vulnerable when mining participation is low. During these periods an attacker can mount devastating attacks, such as double spending or censorship of transactions. We put forth the first rigorous study of checkpointing as a mechanism to protect distributed ledgers from such 51% attacks. The core idea is to employ an external set of parties that assist the ledger by finalizing blocks shortly after their creation. This service takes the form of checkpointing and timestamping; checkpointing ensures low latency in a federated setting, while timestamping is fully decentralized. Contrary to existing checkpointing designs, ours is the first to ensure both consistency and liveness. We identify a previously undocumented attack against liveness, “block lead”, which enables Denial-of-Service and censorship to take place in existing checkpointed settings. We showcase our results on a checkpointed version of Ethereum Classic, a system which recently suffered a 51% attack, and build a federated distributed checkpointing service, which provides high assurance with low performance requirements. Finally, we fully decentralize our scheme, in the form of timestamping on a secure distributed ledger, and evaluate its performance using Bitcoin and Ethereum

Filling the Tax Gap via Programmable Money

We discuss the problem of facilitating tax auditing assuming "programmable money", i.e., digital monetary instruments that are managed by an underlying distributed ledger. We explore how a taxation authority can verify the declared returns of its citizens and create a counter-incentive to tax evasion by two distinct mechanisms. First, we describe a design which enables auditing it as a built-in feature with minimal changes on the underlying ledger's consensus protocol. Second, we offer an application-layer extension, which requires no modification in the underlying ledger's design. Both solutions provide a high level of privacy, ensuring that, apart from specific limited data given to the taxation authority, no additional information - beyond the information already published on the underlying ledger - is leaked

Digital asset management via distributed ledgers

Distributed ledgers rose to prominence with the advent of Bitcoin, the first provably secure protocol to solve consensus in an open-participation setting. Following, active research and engineering efforts have proposed a multitude of applications and alternative designs, the most prominent being Proof-of-Stake (PoS). This thesis expands the scope of secure and efficient asset management over a distributed ledger around three axes: i) cryptography; ii) distributed systems; iii) game theory and economics. First, we analyze the security of various wallets. We start with a formal model of hardware wallets, followed by an analytical framework of PoS wallets, each outlining the unique properties of Proof-of-Work (PoW) and PoS respectively. The latter also provides a rigorous design to form collaborative participating entities, called stake pools. We then propose Conclave, a stake pool design which enables a group of parties to participate in a PoS system in a collaborative manner, without a central operator. Second, we focus on efficiency. Decentralized systems are aimed at thousands of users across the globe, so a rigorous design for minimizing memory and storage consumption is a prerequisite for scalability. To that end, we frame ledger maintenance as an optimization problem and design a multi-tier framework for designing wallets which ensure that updates increase the ledger’s global state only to a minimal extent, while preserving the security guarantees outlined in the security analysis. Third, we explore incentive-compatibility and analyze blockchain systems from a micro and a macroeconomic perspective. We enrich our cryptographic and systems' results by analyzing the incentives of collective pools and designing a state efficient Bitcoin fee function. We then analyze the Nash dynamics of distributed ledgers, introducing a formal model that evaluates whether rational, utility-maximizing participants are disincentivized from exhibiting undesirable infractions, and highlighting the differences between PoW and PoS-based ledgers, both in a standalone setting and under external parameters, like market price fluctuations. We conclude by introducing a macroeconomic principle, cryptocurrency egalitarianism, and then describing two mechanisms for enabling taxation in blockchain-based currency systems

SoK: A Stratified Approach to Blockchain Decentralization

Decentralization has been touted as the principal security advantage which propelled blockchain systems at the forefront of developments in the financial technology space. Its exact semantics nevertheless remain highly contested and ambiguous, with proponents and critics disagreeing widely on the level of decentralization offered. To address this, we put forth a systematization of the current landscape with respect to decentralization and we derive a methodology that can help direct future research towards defining and measuring decentralization. Our approach dissects blockchain systems into multiple layers, or strata, each possibly encapsulating multiple categories, and enables a unified method for measuring decentralization in each one. Our layers are (1) hardware, (2) software, (3) network, (4) consensus, (5) economics ("tokenomics"), (6) API, (7) governance, and (8) geography. Armed with this stratification, we examine for each layer which pertinent properties of distributed ledgers (safety, liveness, privacy, stability) can be at risk due to centralization and in what way. Our work highlights the challenges in measuring and achieving decentralization, points to the degree of (de)centralization of various existing systems, where such assessment can be made from presently available public information, and suggests potential metrics and directions where future research is needed. We also introduce the "Minimum Decentralization Test", as a way to assess the decentralization state of a blockchain system and, as an exemplary case, we showcase how it can be applied to Bitcoin

Cryptocurrency Egalitarianism: A Quantitative Approach

Since the invention of Bitcoin one decade ago, numerous cryptocurrencies have sprung into existence. Among these, proof-of-work is the most common mechanism for achieving consensus, whilst a number of coins have adopted "ASIC-resistance" as a desirable property, claiming to be more "egalitarian,"S where egalitarianism refers to the power of each coin to participate in the creation of new coins. While proof-of-work consensus dominates the space, several new cryptocurrencies employ alternative consensus, such as proof-of-stake in which block minting opportunities are based on monetary ownership. A core criticism of proof-of-stake revolves around it being less egalitarian by making the rich richer, as opposed to proof-of-work in which everyone can contribute equally according to their computational power. In this paper, we give the first quantitative definition of a cryptocurrency's \emph{egalitarianism}. Based on our definition, we measure the egalitarianism of popular cryptocurrencies that (may or may not) employ ASIC-resistance, among them Bitcoin, Ethereum, Litecoin, and Monero. Our simulations show, as expected, that ASIC-resistance increases a cryptocurrency's egalitarianism. We also measure the egalitarianism of a stake-based protocol, Ouroboros, and a hybrid proof-of-stake/proof-of-work cryptocurrency, Decred. We show that stake-based cryptocurrencies, under correctly selected parameters, can be perfectly egalitarian, perhaps contradicting folklore belief.Comment: 29 pages, 4 figures, Tokenomics 201

Blockchain Nash Dynamics and the Pursuit of Compliance

We study "Nash dynamics" in the context of adversarial deviations in blockchain protocols. We introduce a formal model, within which one can assess whether the Nash dynamics can lead utility-maximizing participants to defect from the "honest" protocol operation, towards variations that exhibit one or more undesirable infractions that affect protocol security, like abstaining from participation and producing conflicting protocol histories. Blockchain protocols that lead to no such infraction states are deemed compliant. Armed with this model, we evaluate the compliance of various Proof-of-Work (PoW) and Proof-of-Stake (PoS) protocol families, under different utility functions and reward schemes, leading to the following results: i) PoW and PoS protocols exhibit different compliance behavior, depending on the lossiness of the network; ii) PoS ledgers can be compliant w.r.t. one realistic infraction (producing conflicting messages) but non-compliant (hence non-equilibria) w.r.t. others (abstaining or an attack we call selfish signing); iii) considering externalities, like exchange rate fluctuations, we quantify the benefit of economic penalties in the context of PoS protocols as mitigation for particular infractions that affect protocol security

Search for dark matter produced in association with bottom or top quarks in √s = 13 TeV pp collisions with the ATLAS detector

A search for weakly interacting massive particle dark matter produced in association with bottom or top quarks is presented. Final states containing third-generation quarks and miss- ing transverse momentum are considered. The analysis uses 36.1 fb−1 of proton–proton collision data recorded by the ATLAS experiment at √s = 13 TeV in 2015 and 2016. No significant excess of events above the estimated backgrounds is observed. The results are in- terpreted in the framework of simplified models of spin-0 dark-matter mediators. For colour- neutral spin-0 mediators produced in association with top quarks and decaying into a pair of dark-matter particles, mediator masses below 50 GeV are excluded assuming a dark-matter candidate mass of 1 GeV and unitary couplings. For scalar and pseudoscalar mediators produced in association with bottom quarks, the search sets limits on the production cross- section of 300 times the predicted rate for mediators with masses between 10 and 50 GeV and assuming a dark-matter mass of 1 GeV and unitary coupling. Constraints on colour- charged scalar simplified models are also presented. Assuming a dark-matter particle mass of 35 GeV, mediator particles with mass below 1.1 TeV are excluded for couplings yielding a dark-matter relic density consistent with measurements