Formal barriers to longest-chain Proof-of-Stake protocols?

Jonah Brown-Cohen, Arvind Narayanan, Alexandros Psomas, S. Matthew Weinberg

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

1 Scopus citations

Abstract

The security of most existing cryptocurrencies is based on a concept called Proof-of-Work, in which users must solve a computationally hard cryptopuzzle to authorize transactions ("one unit of computation, one vote"). This leads to enormous expenditure on hardware and electricity in order to collect the rewards associated with transaction authorization. Proof-of-Stake is an alternative concept that instead selects users to authorize transactions proportional to their wealth ("one coin, one vote"). Some aspects of the two paradigms are the same. For instance, obtaining voting power in Proof-of-Stake has a monetary cost just as in Proof-of-Work: a coin cannot be freely duplicated any more easily than a unit of computation. However some aspects are fundamentally different. In particular, exactly because Proof-of-Stake is wasteless, there is no inherent resource cost to deviating (commonly referred to as the "Nothing-at-Stake" problem). In contrast to prior work, we focus on incentive-driven deviations (any participant will deviate if doing so yields higher revenue) instead of adversarial corruption (an adversary may take over a significant fraction of the network, but the remaining players follow the protocol). The main results of this paper are several formal barriers to designing incentive-compatible proof-of-stake cryptocurrencies (that don't apply to proof-of-work).

Original languageEnglish (US)
Title of host publicationACM EC 2019 - Proceedings of the 2019 ACM Conference on Economics and Computation
PublisherAssociation for Computing Machinery, Inc
Pages459-473
Number of pages15
ISBN (Electronic)9781450367929
DOIs
StatePublished - Jun 17 2019
Event20th ACM Conference on Economics and Computation, EC 2019 - Phoenix, United States
Duration: Jun 24 2019Jun 28 2019

Publication series

NameACM EC 2019 - Proceedings of the 2019 ACM Conference on Economics and Computation

Conference

Conference20th ACM Conference on Economics and Computation, EC 2019
CountryUnited States
CityPhoenix
Period6/24/196/28/19

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Statistics and Probability
  • Computer Science (miscellaneous)
  • Computational Mathematics
  • Marketing

Keywords

  • Cryptocurrencies
  • Longest chain
  • Proof of stake

Fingerprint Dive into the research topics of 'Formal barriers to longest-chain Proof-of-Stake protocols?'. Together they form a unique fingerprint.

Cite this