Bitcoin's Security Model Revisited (1605.09193v2)

Abstract: We revisit the fundamental question of Bitcoin's security against double spending attacks. While previous work has bounded the probability that a transaction is reversed, we show that no such guarantee can be effectively given if the attacker can choose when to launch the attack. Other approaches that bound the cost of an attack have erred in considering only limited attack scenarios, and in fact it is easy to show that attacks may not cost the attacker at all. We therefore provide a different interpretation of the results presented in previous papers and correct them in several ways. We provide different notions of the security of transactions that provide guarantees to different classes of defenders: merchants who regularly receive payments, miners, and recipients of large one-time payments. We additionally consider an attack that can be launched against lightweight clients, and show that these are less secure than their full node counterparts and provide the right strategy for defenders in this case as well. Our results, overall, improve the understanding of Bitcoin's security guarantees and provide correct bounds for those wishing to safely accept transactions.

Bitcoin's Security Model: A Critical Reevaluation

The paper "Bitcoin's Security Model Revisited" by Yonatan Sompolinsky and Aviv Zohar provides a thorough reexamination of the security guarantees surrounding Bitcoin, specifically focusing on the risk of double spending attacks and the limitations of existing security models in addressing this threat. Bitcoin, as a digital currency, relies on the blockchain to ensure the irreversibility of transactions, and this paper rigorously analyzes various attack scenarios that could compromise its security.

Key Security Concerns

Bitcoin is susceptible to double spending, where an adversary attempts to spend the same amount of Bitcoin in multiple transactions. Traditionally, security models have assumed these attacks are mitigated by the rule that the longest chain of blocks in the blockchain is recognized as valid, under the presumption that attackers do not control more than 50% of the network's computational power. However, Sompolinsky and Zohar argue convincingly that no probabilistic defense can guarantee that an attack will fail if an attacker can choose when to initiate an attack. This is particularly true when considering nuanced strategies such as pre-mining, which could allow attackers to prepare in advance and to enact an attack with assured success.

Novel Insights and Security Models

The authors challenge the prevailing notion that Bitcoin transactions become exponentially more secure as more block confirmations are received. Instead, they propose refined models for assessing transaction security that cater to different kinds of defenders, including:

• Merchants regularly receiving payments: These entities are exposed to certain patterns of loss when dealing with double spending attacks.
• Miners: Who are involved in transaction processing and confirmation.
• Recipients of large one-time payments: Who face heightened risk from attackers awaiting optimal moments to strike.

A particularly insightful element of the paper is the identification of vulnerabilities in light-weight nodes compared to full nodes. Light nodes, which do not keep a complete copy of the blockchain, are shown to be significantly less secure against attacks such as the generalized Vector76 attack. The Vector76 strategy exploits this vulnerability to conduct double spending attacks under specific conditions where the node fails to relay blocks.

Implications for Bitcoin Security

The paper's findings imply substantial theoretical and practical repercussions for Bitcoin's security design. Practically, it suggests merchants and miners need more robust protocols and waiting times that can dynamically adapt to evolving security threats rather than relying on a fixed number of confirmations. Theoretically, this investigation emphasizes the need for deeper introspection into Bitcoin's core architectural assumptions, inviting future research into mitigative strategies and alternative blockchain consensus approaches.

Future Directions

The elevation of new security models and acknowledgments of inherent weaknesses in prevailing systems suggest fertile ground for future research. The authors propose several avenues, including exploring the impact of network delay on blockchain security, considering hybrid security requirements for less frequent transactions, and extending their analysis to alternative blockchains like Ethereum and Bitcoin-NG. Additionally, exploring quantitative models of attacker profitability could reveal ways to economically deter malicious activities.

In conclusion, "Bitcoin's Security Model Revisited" serves as a significant contribution to the discourse on blockchain security. While Bitcoin has succeeded in creating a decentralized currency system, understanding and addressing the intricacies of its security model is essential for the ongoing evolution of cryptocurrency technologies. This paper provides critical insights for researchers and practitioners seeking to enhance the resilience and reliability of Bitcoin and similar systems.