On the Phase Space of Block-Hiding Strategies in Bitcoin-like networks

TL;DR

This paper analyzes the success probabilities of block-hiding strategies in Bitcoin-like networks, identifying conditions under which these strategies outperform standard mining and proposing a generalized measure of miner influence.

Contribution

It introduces a detailed probabilistic analysis of block-hiding strategies and generalizes the concept of miner influence based on relative hashing power.

Findings

Block-hiding strategies are advantageous above a certain influence threshold.

Two types of block-hiding strategies are characterized and compared.

The analysis extends the understanding of miner influence beyond traditional measures.

Abstract

We calculate the probability of success of block-hiding mining strategies in Bitcoin-like networks. These strategies involve building a secret branch of the block-tree and publishing it opportunistically, aiming to replace the top of the main branch and rip the reward associated with the secretly mined blocks. We identify two types of block-hiding strategies and chart the parameter space where those are more beneficial than the standard mining strategy described in Nakamoto's paper. Our analysis suggests a generalization of the notion of the relative hashing power as a measure for a miner's influence on the network. Block-hiding strategies are beneficial only when this measure of influence exceeds a certain threshold.