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MoneroResearch.info |
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Gong, T., Minaei, M., Sun, W., & Kate, A. 2022, May 2–6, Towards Overcoming the Undercutting Problem. Unpublished paper presented at Financial Cryptography and Data Security 2022. Added by: Rucknium (05/05/2022, 21:01) |
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| Resource type: Conference Paper BibTeX citation key: Gong2022 View all bibliographic details  |
Categories: Monero-focused Creators: Gong, Kate, Minaei, Sun Collection: Financial Cryptography and Data Security 2022 |
Views: 98/2723
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Attachments
143.pdf  [17/1020]
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URLs https://fc22.ifca. ... roceedings/143.pdf |
| Abstract |
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Mining processes of Bitcoin and similar cryptocurrencies are currently incentivized with voluntary transaction fees and fixed block rewards which will halve gradually to zero. In the setting where optional and arbitrary transaction fee becomes the prominent/remaining incen- tive, Carlsten et al. [CCS 2016] find that an undercutting attack can be- come the equilibrium strategy for miners. In undercutting, the attacker deliberately forks an existing chain by leaving wealthy transactions un- claimed to attract petty complaint miners to its fork. We observe that two simplifying assumptions in [CCS 2016] of fees arriving at fixed rates and miners collecting all accumulated fees regardless of block size limit are often infeasible in practice and find that they are inaccurately inflating profitability of undercutting. Studying Bitcoin and Monero blockchain data, we find that the fees deliberately left out by an undercutter may not be attractive to other miners (hence to the attacker itself): the de- liberately left out transactions may not fit into a new block without “squeezing out” some other to-be transactions, and thus claimable fees in the next round cannot be raised arbitrarily. This work views undercutting and shifting among chains rationally as mining strategies of rational miners. We model profitability of undercut- ting strategy with block size limit present, which bounds the claimable fees in a round and gives rise to a pending (cushion) transaction set. In the proposed model, we first identify the conditions necessary to make undercutting profitable. We then present an easy-to-deploy defense against undercutting by selectively assembling transactions into the new block to invalidate the identified conditions. Indeed, under a typical set- ting with undercutters present, applying this avoidance technique is a Nash Equilibrium. Finally, we complement the above analytical results with an experimental analysis using both artificial data of normally dis- tributed fee rates and actual transactions in Bitcoin and Monero. |