Proof-of-Stake Longest Chain Protocols: Security vs Predictability
This addresses the security limitations of energy-efficient blockchain protocols for decentralized systems, offering a novel theoretical improvement over existing designs.
The paper tackles the trade-off between security and predictability in proof-of-stake longest chain protocols, proving that a natural protocol achieves security against adversaries with less than 1/(1+e) fraction of total stake and proposing a new family of protocols that achieve security against a 50% adversary with only short-term predictability.
The Nakamoto longest chain protocol is remarkably simple and has been proven to provide security against any adversary with less than 50% of the total hashing power. Proof-of-stake (PoS) protocols are an energy efficient alternative; however existing protocols adopting Nakamoto's longest chain design achieve provable security only by allowing long-term predictability (which have serious security implications). In this paper, we prove that a natural longest chain PoS protocol with similar predictability as Nakamoto's PoW protocol can achieve security against any adversary with less than 1/(1+e) fraction of the total stake. Moreover we propose a new family of longest chain PoS protocols that achieve security against a 50% adversary, while only requiring short-term predictability. Our proofs present a new approach to analyzing the formal security of blockchains, based on a notion of adversary-proof convergence.