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From: Jonathan Toomim <j@toom.im>
In-Reply-To: <ema8a70574-c28e-4c43-a1e3-5f2f4df7d3a2@platinum>
Date: Sat, 26 Dec 2015 13:22:36 -0800
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To: Bitcoin Dev <bitcoin-dev@lists.linuxfoundation.org>
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Subject: Re: [bitcoin-dev] We need to fix the block withholding attack
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Another option for how to deal with block withholding attacks: Give the =
miner who finds the block a bonus. This could even be part of the =
coinbase transaction.

Block withholding is effective because it costs the attacker 0% and =
costs the pool 100%. If the pool's coinbase tx was 95% to the pool, 5% =
(1.25 BTC) to the miner, that would make block withholding attacks much =
more expensive to the attacker without making a huge impact on reward =
variance for small miners. If your pool gets attacked by a block =
withholding attack, then you can respond by jacking up the bonus ratio. =
At some point, block withholding attacks become unfeasibly expensive to =
perform. This can work because the pool sacrifices a small amount of =
variance for its customers by increasing the bonus, but the block =
attacker sacrifices revenue. This should make the attacker give up =
before the pool does.

This system already exists in p2pool, although there the reward bonus =
for the block's finder is only 0.5%.

This must have been proposed before, right? Anyone know of a good =
analysis of the game theory math?

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