Data-Driven Model-Based Analysis of the Ethereum Verifier's Dilemma

In proof-of-work based blockchains such as Ethereum, verification of blocks is an integral part of establishing consensus across nodes. However, in Ethereum, miners do not receive a reward for verifying. This implies that miners face the Verifier's Dilemma: use resources for verification, or us...

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Bibliographic Details
Published in:arXiv.org 2020-04
Main Authors: Maher Alharby, Roben Castagna Lunardi, Aldweesh, Amjad, Aad van Moorsel
Format: Article
Language:English
Subjects:
Computer simulation
Data collection
Discrete event systems
Machine learning
Miners
Probabilistic models
Regression analysis
Verification
Online Access:Get full text
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Summary:In proof-of-work based blockchains such as Ethereum, verification of blocks is an integral part of establishing consensus across nodes. However, in Ethereum, miners do not receive a reward for verifying. This implies that miners face the Verifier's Dilemma: use resources for verification, or use them for the more lucrative mining of new blocks? We provide an extensive analysis of the Verifier's Dilemma, using a data-driven model-based approach that combines closed-form expressions, machine learning techniques and discrete-event simulation. We collect data from over 300,000 smart contracts and experimentally obtain their CPU execution times. Gaussian Mixture Models and Random Forest Regression transform the data into distributions and inputs suitable for the simulator. We show that, indeed, it is often economically rational not to verify. We consider two approaches to mitigate the implications of the Verifier's Dilemma, namely parallelization and active insertion of invalid blocks, both will be shown to be effective.
ISSN:2331-8422