Brian Shultz

Abstract Bitcoin is a digital cryptocurrency that maintains a published time-ordered record of transactions, termed the blockchain. Bitcoin’s novelty stems from its decentralized system of payments that operates without the need for a third party institution. Although celebrated for its decentralization, we show that the protocol incentivizes centralization through mining pools. Such centralization coupled with malicious schemes such as Selfish Mining, which financially incentivizes withholding solutions to blocks, leave the protocol vulnerable to attack. In order to mitigate these vulnerabilities, we identify the roots of their cause: block races and blockchain forks, and propose schemes to limit these occurrences. Such solutions involve implementing proof-of-witness schemes in order to eliminate block-withholding attacks. Before miners can continue mining on a solved block, they must obtain a set of multiple signatures from the network as proof that they were witnessed. Furthermore, we propose that the selection of signatories be random and published by a publicly known oracle.