Resilience analysis for double spending via sequential decision optimization

Hinz, J

Resilience analysis for double spending via sequential decision optimization

Hinz, J

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Publisher:: MDPI AG
Publication Type:: Journal Article
Citation:: Applied System Innovation, 2020, 3, (1)
Issue Date:: 2020-03-01

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Field	Value	Language
dc.contributor.author	Hinz, J https://orcid.org/0000-0003-4076-8818
dc.date.accessioned	2021-01-14T04:38:37Z
dc.date.available	2021-01-14T04:38:37Z
dc.date.issued	2020-03-01
dc.identifier.citation	Applied System Innovation, 2020, 3, (1)
dc.identifier.issn	2571-5577
dc.identifier.issn	2571-5577
dc.identifier.uri	http://hdl.handle.net/10453/145430
dc.description.abstract	© 2020 by the authors. Licensee MDPI, Basel, Switzerland. Recently, diverse concepts originating from blockchain ideas have gained increasing popularity. One of the innovations in this technology is the use of the proof-of-work (PoW) concept for reaching a consensus within a distributed network of autonomous computer nodes. This goal has been achieved by design of PoW-based protocols with a built-in equilibrium property: If all participants operate honestly then the best strategy of any agent is also to follow the same protocol. However, there are concerns about the stability of such systems. In this context, the analysis of attack vectors, which represent potentially successful deviations from the honest behavior, turns out to be the most crucial question. Naturally, stability of a blockchain system can be assessed only by determining its most vulnerable components. For this reason, knowing the most successful attacks, regardless of their sophistication level, is inevitable for a reliable stability analysis. In this work, we focus entirely on blockchain systems which are based on the proof-of-work consensus protocols, referred to as PoW-based systems, and consider planning and launching an attack on such system as an optimal sequential decision-making problem under uncertainty. With our results, we suggest a quantitative approach to decide whether a given PoW-based system is vulnerable with respect to this type of attack, which can help assessing and improving its stability.
dc.language	en
dc.publisher	MDPI AG
dc.relation.ispartof	Applied System Innovation
dc.relation.isbasedon	10.3390/asi3010007
dc.rights	info:eu-repo/semantics/restrictedAccess
dc.title	Resilience analysis for double spending via sequential decision optimization
dc.type	Journal Article
utslib.citation.volume	3
pubs.organisational-group	/University of Technology Sydney/Faculty of Science
pubs.organisational-group	/University of Technology Sydney/Strength - QFRC - Quantitative Finance Research Centre
pubs.organisational-group	/University of Technology Sydney/Faculty of Science/School of Mathematical and Physical Sciences
pubs.organisational-group	/University of Technology Sydney
utslib.copyright.status	closed_access	*
pubs.consider-herdc	false
dc.date.updated	2021-01-14T04:38:28Z
pubs.issue	1
pubs.publication-status	Published
pubs.volume	3
utslib.citation.issue	1

Abstract:

© 2020 by the authors. Licensee MDPI, Basel, Switzerland. Recently, diverse concepts originating from blockchain ideas have gained increasing popularity. One of the innovations in this technology is the use of the proof-of-work (PoW) concept for reaching a consensus within a distributed network of autonomous computer nodes. This goal has been achieved by design of PoW-based protocols with a built-in equilibrium property: If all participants operate honestly then the best strategy of any agent is also to follow the same protocol. However, there are concerns about the stability of such systems. In this context, the analysis of attack vectors, which represent potentially successful deviations from the honest behavior, turns out to be the most crucial question. Naturally, stability of a blockchain system can be assessed only by determining its most vulnerable components. For this reason, knowing the most successful attacks, regardless of their sophistication level, is inevitable for a reliable stability analysis. In this work, we focus entirely on blockchain systems which are based on the proof-of-work consensus protocols, referred to as PoW-based systems, and consider planning and launching an attack on such system as an optimal sequential decision-making problem under uncertainty. With our results, we suggest a quantitative approach to decide whether a given PoW-based system is vulnerable with respect to this type of attack, which can help assessing and improving its stability.

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http://hdl.handle.net/10453/145430