Proof-of-Stake Longest Chain Protocols: Security vs Predictability

TL;DR

This paper analyzes the security and predictability trade-offs in proof-of-stake longest chain protocols, proposing new protocols that improve security while reducing predictability requirements.

Contribution

It introduces a proof-of-stake protocol with security comparable to proof-of-work and a new family of protocols with enhanced security and lower predictability.

Findings

PoS protocol achieves security against less than 1/(1+e) stake fraction.

New protocols attain security against 50% adversaries with short-term predictability.

The paper presents a novel approach to formal security analysis based on adversary-proof convergence.

Abstract

The Nakamoto longest chain protocol is remarkably simple and has been proven to provide security against any adversary with less than 50% of the total hashing power. Proof-of-stake (PoS) protocols are an energy efficient alternative; however existing protocols adopting Nakamoto's longest chain design achieve provable security only by allowing long-term predictability (which have serious security implications). In this paper, we prove that a natural longest chain PoS protocol with similar predictability as Nakamoto's PoW protocol can achieve security against any adversary with less than 1/(1+e) fraction of the total stake. Moreover we propose a new family of longest chain PoS protocols that achieve security against a 50% adversary, while only requiring short-term predictability. Our proofs present a new approach to analyzing the formal security of blockchains, based on a notion of adversary-proof convergence.