Proof-of-stake at stake: Predatory, destructive attack on PoS cryptocurrencies

Suhyeon Lee, Seungjoo Kim

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

There have been several 51% attacks on Proof-of-Work (PoW) blockchains recently, including Verge and GameCredits, but the most noteworthy has been the attack that saw hackers make off with up to $18 million after a successful double-spend was executed on the Bitcoin Gold network. For this reason, the Proof-of-Stake (PoS) algorithm, which already has advantages of energy efficiency and throughput, is attracting attention as an alternative to the PoW algorithm. With a PoS, the attacker needs to obtain 51% of the cryptocurrency to carry out a 51% attack. But unlike PoW, the attacker in a PoS system is highly discouraged from launching a 51% attack because he would have to risk losing his entire stake amount to do so. Moreover, even if a 51% attack succeeds, the value of PoS-based cryptocurrency will fall, and the attacker with the most stake will eventually lose the most. In this paper, we propose a predatory, destructive attack on PoS cryptocurrencies. The attacker destroys the PoS cryptocurrency system. Then, using the significant depreciation of cryptocurrency, our method can make a profit from a 51% attack on the PoS cryptocurrencies using the traditional stock market's short selling (or shorting) concept. Our findings are an example to show that the conventional myth that "a destructive attack that destroys the blockchain ecosystem totally will not occur because it is fundamentally unprofitable to the attacker itself"may be wrong.

Original languageEnglish
Title of host publicationCRYBLOCK 2020 - Proceedings of the 3rd Workshop on Cryptocurrencies and Blockchains for Distributed Systems, Part of MobiCom 2020
PublisherAssociation for Computing Machinery
Pages7-11
Number of pages5
ISBN (Electronic)9781450380799
DOIs
Publication statusPublished - 2020 Sep 25
Event3rd Workshop on Cryptocurrencies and Blockchains for Distributed Systems, CRYBLOCK 2020 - Part of MobiCom 2020 - London, United Kingdom
Duration: 2020 Sep 25 → …

Publication series

NameCRYBLOCK 2020 - Proceedings of the 3rd Workshop on Cryptocurrencies and Blockchains for Distributed Systems, Part of MobiCom 2020

Conference

Conference3rd Workshop on Cryptocurrencies and Blockchains for Distributed Systems, CRYBLOCK 2020 - Part of MobiCom 2020
Country/TerritoryUnited Kingdom
CityLondon
Period20/9/25 → …

Keywords

  • 51% attack
  • blockchain
  • cryptocurrency
  • ethereum
  • proof-of-stake
  • security
  • short selling
  • shorting

ASJC Scopus subject areas

  • Computer Networks and Communications
  • Electrical and Electronic Engineering

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