"Zero Cost'' Majority Attacks on Permissionless Blockchains

TL;DR

This paper reveals that majority attacks on permissionless blockchains can be executed at negative cost, challenging the assumption that economic costs prevent such attacks and highlighting the need for social mechanisms for security.

Contribution

It demonstrates the existence of negative-cost majority attacks, exposing a fundamental vulnerability in blockchain consensus protocols and emphasizing the importance of external social security measures.

Findings

Majority attacks can be performed at negative cost.

Current protocol mechanisms are insufficient for security.

Negative cost attacks are harder to detect externally.

Abstract

The core premise of permissionless blockchains is their reliable and secure operation without the need to trust any individual agent. At the heart of blockchain consensus mechanisms is an explicit cost (whether work or stake) for participation in the network and the opportunity to add blocks to the blockchain. A key rationale for that cost is to make attacks on the network, which could be theoretically carried out if a majority of nodes were controlled by a single entity, too expensive to be worthwhile. We demonstrate that a majority attacker can successfully attack with a {\em negative cost}, which shows that the protocol mechanisms are insufficient to create a secure network, and emphasizes the importance of socially driven mechanisms external to the protocol. At the same time, negative cost enables a new type of majority attack that is more likely to elude external scrutiny.