Selfish Mining Attacks Exacerbated by Elastic Hash Supply

TL;DR

This paper investigates how selfish mining attacks, combined with elastic hash supply, can lead to chain collapse or stable states, emphasizing the impact of miner profitability on attack dynamics.

Contribution

It provides an empirical analysis linking miner profitability to hash rate and a theoretical model showing potential outcomes of selfish mining with elastic hash supply.

Findings

Mining profitability correlates with total hash rate.

Selfish mining can cause chain collapse or reach stable equilibrium.

Elastic hash supply amplifies attack effects.

Abstract

Several attacks have been proposed against Proof-of-Work blockchains, which may increase the attacker's share of mining rewards (e.g., selfish mining, block withholding). A further impact of such attacks, which has not been considered in prior work, is that decreasing the profitability of mining for honest nodes incentivizes them to stop mining or to leave the attacked chain for a more profitable one. The departure of honest nodes exacerbates the attack and may further decrease profitability and incentivize more honest nodes to leave. In this paper, we first present an empirical analysis showing that there is a statistically significant correlation between the profitability of mining and the total hash rate, confirming that miners indeed respond to changing profitability. Second, we present a theoretical analysis showing that selfish mining under such elastic hash supply leads either to the collapse of a chain, i.e., all honest nodes leaving, or to a stable equilibrium depending on the attacker's initial share.