Not So Predictable Mining Pools: Attacking Solo Mining Pools by Bagging Blocks and Conning Competitors

Jordan Holland, R. Joseph Connor, J. Parker Diamond, Jared M. Smith, and Max Schuchard
22nd International Conference on Financial Cryptography and Data Security (FC)

In this paper we present three attacks against the predictable solo mining (PSM) scheme. In PSM, miners receive shares for submitting partially valid solutions to the current Proof of Work, adding those shares to their account. When the pool successfully mines a block, the block is awarded to the miner with the most shares, and the rewarded miner “pays” an amount of shares equal to the next highest miner’s to claim the block. Our attacks take advantage of the fact that the amount of shares expended winning two different blocks, which have the same monetary value, can vary by up to a factor of four. We show that by strategically spreading its shares across multiple accounts, a malicious miner can generate more revenue than a naive miner of the same computational power by only claiming blocks with a low share cost. By doing so, a miner can reduce computational power it must expend to win a block by more than 30%. Our other two attacks reduce the profitability of victim miners in the pool by minimizing the gap between first and second place when the victim wins a block. This drives up the average amount of computational power the victim must contribute to receive a reward. An adversary not concerned with cost can reduce the number of shares a victim retains after winning a block by up to 26%. We also find that an adversary with more computational power than their victim can reduce the number of shares the victim retains after winning a block by more than 8% with only limited impact on the adversary’s profitability