Profit lag and alternate network mining
This addresses security vulnerabilities in Proof-of-Work cryptocurrencies, particularly for miners and network developers, but is incremental as it builds on existing mining attack concepts.
The paper tackles the problem of quantifying profitability in blockchain mining attacks by introducing 'profit lag' and computing closed forms for selfish mining, intermittent selfish mining, and a new 'alternate network mining' strategy, showing that the latter is more profitable and harder to counter.
For a mining strategy we define the notion of "profit lag" as the minimum time it takes to be profitable after that moment. We compute closed forms for the profit lag and the revenue ratio for the strategies "selfish mining" and "intermittent selfish mining". This confirms some earlier numerical simulations and clarifies misunderstandings on profitability in the literature. We also study mining pairs of PoW cryptocurrencies, often coming from a fork, with the same mining algorithm. This represents a vector of attack that can be exploited using the "alternate network mining" strategy that we define. We compute closed forms for the profit lag and the revenue ratiofor this strategy that is more profitable than selfish mining and intermittent selfish mining. It is also harder to counter since it does not rely on a flaw in the difficulty adjustment formula that is the reason for profitability of the other strategies.