Data-Driven Model-Based Analysis of the Ethereum Verifier's Dilemma
This addresses a consensus security problem for Ethereum miners and users, but the analysis is incremental, building on known issues with verification incentives.
The paper tackles the Verifier's Dilemma in Ethereum, where miners lack incentives to verify blocks, and shows it is often economically rational not to verify, with mitigation strategies like parallelization and invalid block insertion proven effective.
In proof-of-work based blockchains such as Ethereum, verification of blocks is an integral part of establishing consensus across nodes. However, in Ethereum, miners do not receive a reward for verifying. This implies that miners face the Verifier's Dilemma: use resources for verification, or use them for the more lucrative mining of new blocks? We provide an extensive analysis of the Verifier's Dilemma, using a data-driven model-based approach that combines closed-form expressions, machine learning techniques and discrete-event simulation. We collect data from over 300,000 smart contracts and experimentally obtain their CPU execution times. Gaussian Mixture Models and Random Forest Regression transform the data into distributions and inputs suitable for the simulator. We show that, indeed, it is often economically rational not to verify. We consider two approaches to mitigate the implications of the Verifier's Dilemma, namely parallelization and active insertion of invalid blocks, both will be shown to be effective.