A novel penalty system to limit profitability of selfish mining

Abstract

In recent times, a new technology – Blockchain was brought forward to the global society. The world is using the term ‘Blockchain technology’ to signify diverse things such as the Bitcoin Blockchain, virtual currencies like Cardano and XRP, and smart contracts. Blockchain-based applications are springing up, covering several fields comprising financial services, reputation system and Internet of Things (IoT), and so on. Generally, Blockchain is implicit to be distributed ledgers that is a list of transactions verified and stored into blocks and shared among a number of computer nodes in a decentralized manner. Similar to any new introduced technology, Blockchain after its implementation by several communities is facing several problems. Among these complications, the famous block-withholding problem known also as selfish mining that can arise anytime in any Blockchain system. This research describes in detail the Blockchain and focuses on solving the problem arising from selfish mining. In Particular, a penalty system is proposed to defend against selfish mining. The approach is based on deducting percentages of the rewards acquired by any selfish miner after solving the PoW, transmitting the block for validation and later addition to the chain. The goal of this research is to specifically find the optimum penalty system to guarantee stop selfish mining and to give an equal opportunity for all miners to get the proper rewards for their contributed work. As a final point, by incorporating this approach, the decentralized nature of Blockchain is preserved, taking the fact that no selfish miner can take control over the system. The involved Blockchain miners are guaranteed to get the proper reward distribution every time they participate in finding a block. Further modifications can be introduced to this approach by modifying the block size in a way to improve any Blockchain network.