Mining Power Destruction Attacks in the Presence of Petty-Compliant Mining Pools

TL;DR

This paper investigates three novel mining power destruction attacks in Bitcoin, analyzing their mechanisms and impacts, especially considering petty-compliant pools, revealing new vulnerabilities and attack strategies that can lower mining difficulty.

Contribution

It introduces a comprehensive analysis of selfish mining, bribery, and mining distraction attacks, including a new bribery method and insights into their effectiveness with petty-compliant pools.

Findings

Selfish mining can be more damaging with well-distributed pools.

Bribery attacks can dominate other strategies for small pools.

Mining distraction attack reduces difficulty without orphan blocks.

Abstract

Bitcoin's security relies on its Proof-of-Work consensus, where miners solve puzzles to propose blocks. The puzzle's difficulty is set by the difficulty adjustment mechanism (DAM), based on the network's available mining power. Attacks that destroy some portion of mining power can exploit the DAM to lower difficulty, making such attacks profitable. In this paper, we analyze three types of mining power destruction attacks in the presence of petty-compliant mining pools: selfish mining, bribery, and mining power distraction attacks. We analyze selfish mining while accounting for the distribution of mining power among pools, a factor often overlooked in the literature. Our findings indicate that selfish mining can be more destructive when the non-adversarial mining share is well distributed among pools. We also introduce a novel bribery attack, where the adversarial pool bribes petty-compliant pools to orphan others' blocks. For small pools, we demonstrate that the bribery attack can dominate strategies like selfish mining or undercutting. Lastly, we present the mining distraction attack, where the adversarial pool incentivizes petty-compliant pools to abandon Bitcoin's puzzle and mine for a simpler puzzle, thus wasting some part of their mining power. Similar to the previous attacks, this attack can lower the mining difficulty, but with the difference that it does not generate any evidence of mining power destruction, such as orphan blocks.