Exclusive Mining of Blockchain Transactions

Strehle, Elias; Ante, Lennart

doi:10.2139/ssrn.3686529

Cited by 8 publications

(10 citation statements)

References 13 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Since the mechanism for prioritizing transactions is similar across most popular cryptocurrencies [20,61,67], our methodology to study miners' adherence can be generalized to other blockchains (e.g., Ethereum).…”

Section: Concluding Discussionmentioning

confidence: 99%

“…Given the timely and widespread coverage of this attack in popular press and other similar attacks on crowdsourced websites for reporting scam transactions [8,72], and with governments trying to blacklist wallet addresses of entities suspected of illegal activities [1,50], we hypothesize that some miners might decelerate or even absolutely exclude the commitment of scam-payment transactions out of fear or ethical concerns. (3) Dark-fee Transactions: Recently, some mining pool operators have started offering transaction acceleration services [2,12,26,58,71], where anyone wanting to prioritize their transactions can pay an additional fee to a specific mining pool via a side-channel (often, the MPO's website or via a privatechannel [67]). Such transaction fees are "dark" or opaque to other mining pools and the public, and we hypothesize that some of the committed low-fee transactions might have been accelerated by using such services.…”

Section: Investigating Norm Violationsmentioning

confidence: 99%

“…Such private side-channel payments that hide the fees a user pays to miners from others have other benefits for the users [2,12,26,58,66]. One well-known advantage is, for instance, avoiding the fee-rate competition in transaction inclusion, particularly during periods of high Mempool congestion; private side-channel payments would reduce a user's transaction cost volatility and curb front-running risks [20,23,67]. We use the data set C to first investigate how such transaction acceleration services work and later propose a simple test for detecting accelerated transactions in the Bitcoin blockchain.…”

Section: Dark-fee Transactionsmentioning

confidence: 99%

“…Another explanation could be that the user issuing the transaction might want to avoid revealing the true fees they are willing to offer publicly, to avoid a fee-rate battle with transactions competing for inclusion in the chain during congestion. Opaque transaction fees can reduce transaction cost volatility, but they may also unfairly bias the level playing field amongst user transactions attempting to front-run one another [20,67].…”

Section: Dark-fee Transactionsmentioning

confidence: 99%

See 3 more Smart Citations

Selfish & opaque transaction ordering in the Bitcoin blockchain

Messias

Alzayat

Chandrasekaran

et al. 2021

Proceedings of the 21st ACM Internet Measurement Conference

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Most public blockchain protocols, including the popular Bitcoin and Ethereum blockchains, do not formally specify the order in which miners should select transactions from the pool of pending (or uncommitted) transactions for inclusion in the blockchain. Over the years, informal conventions or "norms" for transaction ordering have, however, emerged via the use of shared software by miners, e.g., the GetBlockTemplate (GBT) mining protocol in Bitcoin Core. Today, a widely held view is that Bitcoin miners prioritize transactions based on their offered "transaction fee-per-byte. " Bitcoin users are, consequently, encouraged to increase the fees to accelerate the commitment of their transactions, particularly during periods of congestion. In this paper, we audit the Bitcoin blockchain and present statistically significant evidence of mining pools deviating from the norms to accelerate the commitment of transactions for which they have (i) a selfish or vested interest, or (ii) received dark-fee payments via opaque (non-public) side-channels. As blockchains are increasingly being used as a record-keeping substrate for a variety of decentralized (financial technology) systems, our findings call for an urgent discussion on defining neutrality norms that miners must adhere to when ordering transactions in the chains. Finally, we make our data sets and scripts publicly available. CCS CONCEPTS• Security and privacy → Social aspects of security and privacy; Economics of security and privacy.

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Section: Concluding Discussionmentioning

confidence: 99%

Section: Investigating Norm Violationsmentioning

confidence: 99%

Section: Dark-fee Transactionsmentioning

confidence: 99%

Section: Dark-fee Transactionsmentioning

confidence: 99%

See 2 more Smart Citations

Selfish & opaque transaction ordering in the Bitcoin blockchain

Messias

Alzayat

Chandrasekaran

et al. 2021

Proceedings of the 21st ACM Internet Measurement Conference

View full text Add to dashboard Cite

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“…The question of why is easily explained. Miners on the network receive transaction costs and newly issued Bitcoins when they successfully solve the proof-of-work process and validate unconfirmed Bitcoin transactions [21], [22]. Accordingly, the why can be explained via a simple monetary incentive.…”

Section: Introductionmentioning

confidence: 99%

Bitcoin’s energy consumption and social costs in relation to its capacity as a settlement layer

Ante

Fiedler

2021

SSRN Journal

Self Cite

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Dissecting Bitcoin and Ethereum Transactions: On the Lack of Transaction Contention and Prioritization Transparency in Blockchains

Messias,

Pahari,

Chandrasekaran

et al. 2023

Lecture Notes in Computer Science

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In permissionless blockchains, transaction issuers include a fee to incentivize miners to include their transactions. To accurately estimate this prioritization fee for a transaction, transaction issuers (or blockchain participants, mjohnme@mpi-sws.orgore generally) rely on two fundamental notions of transparency, namely contention and prioritization transparency. Contention transparency implies that participants are aware of every pending transaction that will contend with a given transaction for inclusion. Prioritization transparency states that the participants are aware of the transaction or prioritization fees paid by every such contending transaction. Neither of these notions of transparency holds well today. Private relay networks, for instance, allow users to send transactions privately to miners. Besides, users can offer fees to miners via either direct transfers to miners’ wallets or off-chain payments—neither of which are public. In this work, we characterize the lack of contention and prioritization transparency in Bitcoin and Ethereum resulting from such practices. We show that private relay networks are widely used and private transactions are quite prevalent. We show that the lack of transparency facilitates miners to collude and overcharge users who may use these private relay networks despite them offering little to no guarantees on transaction prioritization. The lack of these transparencies in blockchains has crucial implications for transaction issuers as well as the stability of blockchains. Finally, we make our data sets and scripts publicly available.

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Exclusive Mining of Blockchain Transactions

Cited by 8 publications

References 13 publications

Selfish & opaque transaction ordering in the Bitcoin blockchain

Selfish & opaque transaction ordering in the Bitcoin blockchain

Bitcoin’s energy consumption and social costs in relation to its capacity as a settlement layer

Dissecting Bitcoin and Ethereum Transactions: On the Lack of Transaction Contention and Prioritization Transparency in Blockchains

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