Bitcoin blockchain dynamics: The selfish-mine strategy in the presence of propagation delay

Abstract

Abstract-In the context of the 'selfish-mine' strategy proposed by Eyal and Sirer, we study the effect of propagation delay on the evolution of the Bitcoin blockchain. First, we use a simplified Markov model that tracks the contrasting states of belief about the blockchain of a small pool of miners and the 'rest of the community' to establish that the use of block-hiding strategies, such as selfish-mine, causes the rate of production of orphan blocks to increase. Then we use a spatial Poisson process model to study values of Eyal and Sirer's parameter γ, which denotes the proportion of the honest community that mine on a previously-secret block released by the pool in response to the mining of a block by the honest community. Finally, we use discrete-event simulation to study the behaviour of a network of Bitcoin miners, a proportion of which is colluding in using the selfish-mine strategy, under the assumption that there is a propagation delay in the communication of information between miners.

On the Bitcoin Limitations to Deliver Fairness to Users

“…Generalizing for an infinite number of rounds r, the expected value E is: Miner Agent Behaviors In the decision model for the user agent, we considered a probability P(f) constant over rounds 9 . On the other hand, in this section we want to shed some light on the miner behavior, in order to have insights on how the probability changes over rounds.…”

“…Hereafter, other works analyzed scenarios where for miners it is more profitable to be selfish than to correctly follow the protocol (cf. [5], [18] and [9], just to cite a few). The blockchain protocol does not rely only on the mining task but also on the information (transactions, blocks, etc.)…”

Distributed Sequential Consensus in Networks: Analysis of Partially Connected Blockchains with Uncertainty

“…This consists of a subset of nodes which diffuse information partially to targets, instead of distributing updates homogeneously [28]. In [29] a Markov chain model is used to analyse the selfish-mine strategy in Bitcoin. This and other block-withholding behaviour can have a devastating effect on the performance if the dishonest community is around half the size of the network.…”

Study on Blockchain Visualization

“…[6] Even though the technology may have business and technical challenges [7], such as acceptance of Bitcoin, its implementation in many other fields, for example Internet of Things, may have a greater significance. [8] However we rely on its implementation in currency that has been studied extensively.…”