Author: Paul Sztorc 2017-05-23 14:22:43
Published on: 2017-05-23T14:22:43+00:00
The risk of a Bitcoin sidechain being attacked and stolen has been discussed by developers. The attack, known as the "Blind Merged Mining" (BMM) method, would involve a majority of miners being bribed in order to mine a new chain that would effectively steal all of the bitcoins in the sidechain reserve. Paul Sztorc suggested that the term "Bitcoins you manage to steal" should be replaced with "Bitcoins you manage to double-spend", but Tier Nolan argued that the former was more accurate. Although miners do not own coins explicitly, they may profit from bribes which come from those who do own them. The value taken from A and given to B in a theft is itself proportionate to 'v', and so any value stored on a sidechain makes potential malfeasance even more abhorrent. If average fees multiplied by timeout is less than the total reserves, then it is worth it for a third party to bid for their theft fork. This does not require miners to coordinate, they just need to take the highest bid. Recent transactions and money on the sidechain are riskier than money deep on the main chain. If the first attacker fails, it discourages others; however, if he succeeds, it weakens sidechains as a concept, creating an incentive for miners to ensure he fails. People may buy up these liabilities using the Lightning Network, and miners themselves may purchase these liabilities. As the attacker creates an illegal fork, this reduces the block rate for the sidechain, meaning there are more transactions per block, pushing up the fees per transaction and therefore weakening the attack.
Updated on: 2023-06-12T01:01:48.885533+00:00