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Majority Is Not Enough: Bitcoin Mining Is Vulnerable

  • Conference paper
  • First Online:
Financial Cryptography and Data Security (FC 2014)

Part of the book series: Lecture Notes in Computer Science ((LNSC,volume 8437))

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Abstract

The Bitcoin cryptocurrency records its transactions in a public log called the blockchain. Its security rests critically on the distributed protocol that maintains the blockchain, run by participants called miners. Conventional wisdom asserts that the mining protocol is incentive-compatible and secure against colluding minority groups, that is, it incentivizes miners to follow the protocol as prescribed.

We show that the Bitcoin mining protocol is not incentive-compatible. We present an attack with which colluding miners obtain a revenue larger than their fair share. This attack can have significant consequences for Bitcoin: Rational miners will prefer to join the selfish miners, and the colluding group will increase in size until it becomes a majority. At this point, the Bitcoin system ceases to be a decentralized currency.

Unless certain assumptions are made, selfish mining may be feasible for any group size of colluding miners. We propose a practical modification to the Bitcoin protocol that protects Bitcoin in the general case. It prohibits selfish mining by pools that command less than \(1/4\) of the resources. This threshold is lower than the wrongly assumed \(1/2\) bound, but better than the current reality where a group of any size can compromise the system.

This research was supported by the NSF Trust STC and by DARPA.

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Notes

  1. 1.

    The criterion is actually the most difficult chain in the block tree, i.e., the one that required (in expectancy) the most mining power to create. To simplify presentation, and because it is usually the case, we assume the set difficulty at the different branches is the same, and so the longest chain is also the most difficult one.

  2. 2.

    The rate at which the new Bitcoins are generated is designed to slowly decrease towards zero, and will reach zero when almost 21 million Bitcoins are created. Then, the miners’ revenue will be only from transaction fees.

  3. 3.

    In alphabetical order.

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Acknowledgements

We are grateful to Raphael Rom, Fred B. Schneider, Eva Tardos, and Dror Kronstein for their valuable advice on drafts of this paper, as well as our shepherd Rainer Böhme for his guidance.

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Authors and Affiliations

  1. Department of Computer Science, Cornell University, Ithaca, USA

    Ittay Eyal & Emin Gün Sirer

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  1. Ittay Eyal
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  2. Emin Gün Sirer
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Correspondence to Ittay Eyal .

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Editors and Affiliations

  1. Carnegie Mellon University, Pittsburgh, Pennsylvania, USA

    Nicolas Christin

  2. University of Calgary, Calgary, Alberta, Canada

    Reihaneh Safavi-Naini

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© 2014 International Financial Cryptography Association

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Eyal, I., Sirer, E.G. (2014). Majority Is Not Enough: Bitcoin Mining Is Vulnerable. In: Christin, N., Safavi-Naini, R. (eds) Financial Cryptography and Data Security. FC 2014. Lecture Notes in Computer Science(), vol 8437. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-45472-5_28

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  • DOI: https://doi.org/10.1007/978-3-662-45472-5_28

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  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-662-45471-8

  • Online ISBN: 978-3-662-45472-5

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