Analysis of Bitcoin Vulnerability to Bribery Attacks Launched Through Large Transactions

TL;DR

This paper demonstrates a novel bribery attack on Bitcoin that exploits miner incentives, significantly undermining the blockchain's security guarantees and suggesting a soft fork as a mitigation.

Contribution

It introduces a new bribery attack model on Bitcoin, providing a mathematical framework and practical strategies that challenge the network's security assumptions.

Findings

Bribery attacks can effectively undermine Bitcoin's security guarantees.

The proposed strategies are practical and feasible under rational miner assumptions.

A soft fork is suggested as a potential fix for the identified vulnerability.

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.