PoW Security-Latency under Random Delays and the Effect of Transaction Fees

TL;DR

This paper analyzes the security and latency of Proof-of-Work blockchain protocols under general random delay models, providing explicit bounds on block security after k confirmations and considering recent Bitcoin halving effects.

Contribution

It offers tight, explicit bounds on PoW security-latency under general random delays, extending previous models and analyzing recent Bitcoin halving impacts.

Findings

Derived explicit bounds based on Poisson arrivals during delays

Extended analysis to include effects of Bitcoin halving

Confirmed security under general random delay distributions

Abstract

Safety guarantees and security-latency problem of Nakamoto consensus have been extensively studied in the last decade with a bounded delay model. Recent studies have shown that PoW protocol is secure under random delay models as well. In this paper, we analyze the security-latency problem, i.e., how secure a block is, after it becomes k-deep in the blockchain, under general random delay distributions. We provide tight and explicit bounds which only require determining the distribution of the number of Poisson arrivals during the random delay. We further consider potential effects of recent Bitcoin halving on the security-latency problem by extending our results.