Abstract
The Bitcoin whitepaper [1] states that security of the system is guaranteed as long as honest miners control more than half of the current total computational power. The whitepaper assumes a static difficulty, thus it is equally hard to solve a cryptographic proof-of-work puzzle for any given moment of system history. However, the real Bitcoin network is using an adaptive difficulty adjustment mechanism.
In this paper we introduce and analyze a new kind of attack on the mining difficulty retargeting function used in Bitcoin which we call “coin-hopping”. In a coin-hopping attack, a malicious miner increases his mining profits while at the same time increasing the average delay between blocks.
We propose an alternative difficulty adjustment algorithm in order to reduce the incentive to perform a coin-hopping attack, and also decrease inter-block delays. Finally, we evaluate our proposed approach and show how its novel algorithm performs better than the original algorithm of Bitcoin.
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Meshkov, D., Chepurnoy, A., Jansen, M. (2017). Short Paper: Revisiting Difficulty Control for Blockchain Systems. In: Garcia-Alfaro, J., Navarro-Arribas, G., Hartenstein, H., Herrera-Joancomartí, J. (eds) Data Privacy Management, Cryptocurrencies and Blockchain Technology. DPM CBT 2017 2017. Lecture Notes in Computer Science(), vol 10436. Springer, Cham. https://doi.org/10.1007/978-3-319-67816-0_25
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DOI: https://doi.org/10.1007/978-3-319-67816-0_25
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