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Analysis of Bitcoin Vulnerability to Bribery Attacks Launched Through Large Transactions

Ghader Ebrahimpour, Mohammad Sayad Haghighi

TL;DR

A novel bribery attack is designed and it is shown how double-spending is possible in the Bitcoin ecosystem for any transaction whose value is above 218.9BTC, and this shows how vulnerable blockchain-based systems like Bitcoin are.

Abstract

Bitcoin uses blockchain technology to maintain transactions order and provides probabilistic guarantee to prevent double-spending, assuming that an attacker's computational power does not exceed %50 of the network power. In this paper, we design a novel bribery attack and show that this guarantee can be hugely undermined. Miners are assumed to be rational in this setup and they are given incentives that are dynamically calculated. In this attack, the adversary misuses the Bitcoin protocol to bribe miners and maximize their gained advantage. We will reformulate the bribery attack to propose a general mathematical foundation upon which we build multiple strategies. We show that, unlike Whale Attack, these strategies are practical. If the rationality assumption holds, this shows how vulnerable blockchain-based systems like Bitcoin are. We suggest a soft fork on Bitcoin to fix this issue at the end.

Analysis of Bitcoin Vulnerability to Bribery Attacks Launched Through Large Transactions

TL;DR

A novel bribery attack is designed and it is shown how double-spending is possible in the Bitcoin ecosystem for any transaction whose value is above 218.9BTC, and this shows how vulnerable blockchain-based systems like Bitcoin are.

Abstract

Bitcoin uses blockchain technology to maintain transactions order and provides probabilistic guarantee to prevent double-spending, assuming that an attacker's computational power does not exceed %50 of the network power. In this paper, we design a novel bribery attack and show that this guarantee can be hugely undermined. Miners are assumed to be rational in this setup and they are given incentives that are dynamically calculated. In this attack, the adversary misuses the Bitcoin protocol to bribe miners and maximize their gained advantage. We will reformulate the bribery attack to propose a general mathematical foundation upon which we build multiple strategies. We show that, unlike Whale Attack, these strategies are practical. If the rationality assumption holds, this shows how vulnerable blockchain-based systems like Bitcoin are. We suggest a soft fork on Bitcoin to fix this issue at the end.

Paper Structure

This paper contains 15 sections, 1 theorem, 19 equations, 5 figures, 2 tables, 3 algorithms.

Table of Contents

  1. Introduction
  2. Related Work
  3. The Proposed Bribery Attack
  4. Assumptions
  5. Attack Process in a Nutshell
  6. Mathematical Analysis of the Attack
  7. A Basic Analysis
  8. Attack Strategies
  9. BFF Strategy
  10. CRB Strategy
  11. GVC Strategy
  12. The Future of Bribery Attack
  13. Possible Countermeasures
  14. Numerical Analysis
  15. Conclusion

Key Result

Theorem 1

Consider two miners, $m_1$ and $m_2$, with the computational powers $P_{m1}$ and $P_{m2}$, respectively. Assuming that $P_{m1} > P_{m2}$, it is more profitable for the attacker to select $m_1$ as the target to add to chain $X$ than $m_2$.

Figures (5)

  • Figure 1: Markov chain model of a bribery attack in Bitcoin.
  • Figure 2: $NewMarkov$ chain, the result of the first step of $Algorithm\ 3$.
  • Figure 3: Success probability of different bribery attack strategies.
  • Figure 4: The amount of bribe at each state for different values of $i$ as the starting state of the attack.
  • Figure 5: The attack cost in the future for different values of Bitcoin block reward

Theorems & Definitions (1)

  • Theorem 1