Re: [Bitcoin-development] Defeating the block withholding attack

[Peter Vessenes]

On Sat, Jun 2, 2012 at 8:52 PM, Luke-Jr l...@dashjr.org wrote:

 Analysis, comments, constructive criticism, etc welcome for the following:

 ==Background==
 At present, an attacker can harm a pool by intentionally NOT submitting
 shares
 that are also valid blocks. All pools are vulnerable to this attack,
 whether
 centralized or decentralized and regardless of reward system used. The
 attack's effectiveness is proportional to ratio of the attacker's hashrate
 to
 the rest of the pool.


I'm unclear on the economics of this attack; we spent a bit of time talking
about it a few months ago at CoinLab and decided not to worry about it for
right now.

Does it have asymmetric payoff for an attacker, that is, over time does it
pay them more to spend their hashes attacking than just mining?

My gut is that it pays less well than mining, meaning I think this is
likely a small problem in the aggregate, and certainly not something we
should try and fork the blockchain for until there's real pain.

Consider, for instance, whether it pays better than just mining bitcoins
and spending those on 'bonuses' for getting users to switch from a pool you
hate.

Watson, I don't believe the attack signature you mention is a factor here,
since the pool controls the merkle, only that pool will benefit from block
submission. The nonce / coinbase combo is worthless otherwise, and so this
attack is just in brief get lucky, but don't submit.

So, can anyone enlighten me as to some actual estimates of badness for this
attack?

Peter
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Re: [Bitcoin-development] Defeating the block withholding attack

[Luke-Jr]

On Monday, June 04, 2012 1:43:42 AM Peter Vessenes wrote:
 Does it have asymmetric payoff for an attacker, that is, over time does it
 pay them more to spend their hashes attacking than just mining?

That depends on the pool's reward scheme. Some complicated forms are capable 
of getting bonus earnings out of the pool. Under all systems, the attacker 
at least gains the hurt the pool benefit. Given the frequency of DDoS 
attacks on pools, it is clear there are people who will even pay for attacks 
that provide no other benefit than harming pools. Under all systems, the 
attacker doesn't lose out in any significant way.

 My gut is that it pays less well than mining, meaning I think this is
 likely a small problem in the aggregate, and certainly not something we
 should try and fork the blockchain for until there's real pain.

If we wait until there's real pain, it will be a painful fork. If we plan it 
1-2 years out, people have time to upgrade on their own before it breaks.

 Consider, for instance, whether it pays better than just mining bitcoins
 and spending those on 'bonuses' for getting users to switch from a pool you
 hate.

With this attack, attackers can hurt the pool's luck factor *and* spend the 
bitcoins they earn to bribe users away.

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threat landscape has changed and how IT managers can respond. Discussions 
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