Analysis of Hashrate-Based Double Spending
This addresses a quantitative gap in understanding Bitcoin security for users and developers, but is incremental as it builds on known qualitative models.
The paper tackles the problem of quantifying attack probabilities in Bitcoin's proof-of-work system, analyzing stochastic processes to determine success rates for double-spending attacks.
Bitcoin is the world's first decentralized digital currency. Its main technical innovation is the use of a blockchain and hash-based proof of work to synchronize transactions and prevent double-spending the currency. While the qualitative nature of this system is well understood, there is widespread confusion about its quantitative aspects and how they relate to attack vectors and their countermeasures. In this paper we take a look at the stochastic processes underlying typical attacks and their resulting probabilities of success.