Author: Matt Corallo 2015-12-20 03:36:10
Published on: 2015-12-20T03:36:10+00:00
During the Scaling Bitcoin conference in Hong Kong, a workshop session was held with representatives of the majority of the Bitcoin hashing power. One issue raised by the pools present was block withholding attacks, which they said were a real issue for them. In particular, pools are receiving legitimate threats by bad actors threatening to use block withholding attacks against them. Pools offering their services to the general public without anti-privacy Know-Your-Customer have little defense against such attacks, which in turn is a threat to the decentralization of hashing power. Without pools, only fairly large hashing power installations are profitable as variance is a very real business expense. Fixing block withholding is relatively simple but requires a SPV-visible hardfork. Luke-Jr's two-stage target mechanism suggests to do this hard-fork in conjunction with any blocksize increase, which will have the desirable side effect of clearly showing consent by the entire ecosystem, including SPV clients. Ittay Eyal and Emin Gun Sirer have argued that block withholding attacks are good things, as in their model they can be used by small pools against larger pools, disincentivising large pools. However, this argument is academic and not applicable to the real world, as a much simpler defense against block withholding attacks is to use anti-privacy KYC and the legal system combined with the variety of withholding detection mechanisms only practical for large pools. Equally, large hashing power installations - a dangerous thing for decentralization - have no block withholding attack vulnerabilities.
Updated on: 2023-05-19T23:00:29.729622+00:00