Mind the Mining
This work addresses mining profitability and environmental impact in cryptocurrencies, but it is incremental as it builds on known attacks like selfish mining.
The paper tackles the problem of mining inefficiency in proof-of-work cryptocurrencies by proposing 'smart' and 'smarter' mining strategies that reduce electricity costs and increase profits for miners, even for smaller ones, while exposing the coin to security vulnerabilities like under 50% attacks.
In this paper we revisit the mining strategies in proof of work based cryptocurrencies and propose two strategies, we call smart and smarter mining, that in many cases strictly dominate honest mining. In contrast to other known attacks, like selfish mining, which induce zero-sum games among the miners, the strategies proposed in this paper increase miners' profit by reducing their variable costs (i.e., electricity). Moreover, the proposed strategies are viable for much smaller miners than previously known attacks, and surprisingly, an attack performed by one miner is profitable for all other miners as well. While saving electricity power is very encouraging for the environment, it is less so for the coin's security. The smart/smarter strategies expose the coin to under 50\% attacks and this vulnerability might only grow when new miners join the coin as a response to the increase in profit margins induced by these strategies.