Introduction to Selfish Mining with Matt Weinberg | a16z crypto research talks | Summary and Q&A

TL;DR

Selfish mining is an attack strategy in Bitcoin where miners can deviate from the longest chain protocol to maximize their rewards, and this talk provides an overview of how it works and the analysis technique used to evaluate its profitability.

Key Insights

• 👊 Selfish mining is an attack strategy in Bitcoin where miners strategically deviate from the longest chain protocol to maximize their rewards.
• ✊ The profitability of selfish mining depends on the fraction of computational power controlled by the selfish miner, with more power increasing the potential rewards.
• 👾 Analysis techniques involve modeling the selfish mining game as a Markov chain and computing the probabilities of state transitions and block counts during those transitions.
• ✊ Selfish mining is only profitable when the selfish miner has a significant fraction of the computational power, usually more than one-third.
• 💦 Follow-up work suggests that while selfish mining is an effective strategy, the difference in profitability compared to following the longest chain protocol decreases as the selfish miner's power decreases.

Transcript

so I am going to focus this talk on giving um an introduction to selfish mining okay so uh uh what's my goal so I'm gonna spend the first portion of the talk um just giving a clear introduction of uh selfish mining so selfish mining is um this uh attack that was discovered uh now maybe eight years ago uh um specifically for Bitcoin and that refers ... Read More

Questions & Answers

Q: What is selfish mining and how does it differ from following the longest chain protocol?

Selfish mining is a strategy where miners deviate from the longest chain protocol to maximize their rewards. Instead of immediately broadcasting their blocks, they wait until another miner finds a block and then selectively broadcast theirs in order to gain an advantage in the longest chain. This strategy differs from following the longest chain protocol, where miners immediately broadcast their blocks and build on top of the longest chain.

Q: How does the analysis technique used in this talk evaluate the profitability of selfish mining?

The analysis technique involves computing the fraction of time spent transitioning between different states in the selfish mining game, as well as tracking the number of blocks produced by the selfish miner and the honest miners during these transitions. By comparing these numbers, the profitability of selfish mining can be determined.

Q: Is selfish mining always profitable?

Selfish mining is only profitable when the selfish miner has a significant fraction of the computational power, typically more than one-third. With less computational power, the rewards gained from the selfish mining strategy are not enough to outweigh the risks and costs associated with the deviation from the longest chain protocol.

Q: How does selfish mining affect the difficulty and rewards in Ethereum's proof-of-work system?

While it is not explicitly discussed in this talk, selfish mining in Ethereum or other proof-of-work systems can potentially impact the difficulty and rewards. By strategically influencing the longest chain, selfish miners may affect the effective difficulty for creating new blocks and increase their chances of getting rewards. However, the specific implications for Ethereum would require further analysis.

Summary & Key Takeaways

• Selfish mining is an attack strategy in Bitcoin where miners can profit by deviating from the longest chain protocol.

• The speaker introduces the concept of selfish mining and presents a formal model and analysis technique to evaluate its profitability.

• They explain how well-connected miners can strategically withhold blocks to gain an advantage in the longest chain, leading to potential rewards.

• The talk also covers related topics such as alternate analysis techniques, changes in the model for transaction fees and proof-of-stake, and potential implications for other cryptocurrencies.