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  4. Breaking Blockchain Rationality with Out-of-Band Collusion
 
conference paper

Breaking Blockchain Rationality with Out-of-Band Collusion

Zhang, Haoqian  
•
Bastankhah, Mahsa
•
Merino, Louis-Henri Manuel Jakob  
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Essex, A
•
Kulyk, O
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January 1, 2024
Financial Cryptography And Data Security. Fc 2023 International Workshops, Fc 2023
8th Workshop on Advances in Secure Electronic Voting (Voting) / 4th Workshop on Coordination of Decentralized Finance (CoDecFin) / 3rd Workshop on Decentralized Finance (DeFi) / 7th Workshop on Trusted Smart Contracts (WTSC)

Blockchain systems often rely on rationality assumptions for their security, expecting that nodes are motivated to maximize their profits. These systems thus design their protocols to incentivize nodes to execute the honest protocol but fail to consider out-of-band collusion. Existing works analyzing rationality assumptions are limited in their scope, either by focusing on a specific protocol or relying on nonexisting financial instruments. We propose a general rational attack on rationality by leveraging an external channel that incentivizes nodes to collude against the honest protocol. Our approach involves an attacker creating an out-of-band bribery smart contract to motivate nodes to double-spend their transactions in exchange for shares in the attacker's profits. We provide a game theory model to prove that any rational node is incentivized to follow the malicious protocol. We discuss our approach to attacking the Bitcoin and Ethereum blockchains, demonstrating that irrational behavior can be rational in real-world blockchain systems when analyzing rationality in a larger ecosystem. We conclude that rational assumptions only appear to make the system more secure and offer a false sense of security under the flawed analysis.

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Type
conference paper
DOI
10.1007/978-3-031-48806-1_31
Web of Science ID

WOS:001166792400031

Author(s)
Zhang, Haoqian  
Bastankhah, Mahsa
Merino, Louis-Henri Manuel Jakob  
Estrada-Galinanes, Vero  
Ford, Bryan Alexander  
Editors
Essex, A
•
Kulyk, O
•
Klages-Mundt, A
•
Werner, S
•
Goodell, G
•
Bracciali, A
•
Perez, D
•
Gudgeon, L
•
Matsuo, S
Date Issued

2024-01-01

Publisher

Springer International Publishing Ag

Publisher place

Cham

Published in
Financial Cryptography And Data Security. Fc 2023 International Workshops, Fc 2023
ISBN of the book

978-3-031-48805-4

978-3-031-48806-1

Volume

13953

Start page

489

End page

501

Subjects

Technology

Editorial or Peer reviewed

REVIEWED

Written at

EPFL

EPFL units
DEDIS  
Event nameEvent placeEvent date
8th Workshop on Advances in Secure Electronic Voting (Voting) / 4th Workshop on Coordination of Decentralized Finance (CoDecFin) / 3rd Workshop on Decentralized Finance (DeFi) / 7th Workshop on Trusted Smart Contracts (WTSC)

Bol, CROATIA

MAY 05, 2023

FunderGrant Number

U.S. Office of Naval Research

N00014-19-1-2361

AXA Research Fund - ICRC

IC3-Ethereum Fund, Algorand Centres of Excellence programme

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Available on Infoscience
March 18, 2024
Use this identifier to reference this record
https://infoscience.epfl.ch/handle/20.500.14299/206470
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