How Does FAW Attack Impact an Imperfect PoW Blockchain: A Simulation-based Approach

Abstract

Malignant miners with small computing power can achieve unfair revenue and degrade system throughput through launching Fork after withholding (FAW) attack in a Proof-of-Work (PoW) blockchain system. The existing works about FAW attack have some of the following issues: (i) only studying Bitcoin blockchain, (ii) assuming that the blockchain network is perfect and then ignoring forks due to block propagation delay, and (iii) assuming that there is only one pool under attack. This paper attempts to investigate FAW attack in imperfect Bitcoin and Ethereum networks where malicious miners attack multiple victim pools. We develop a simulator to capture the chain dynamics under FAW attack in a PoW system where the longest-chain protocol is used. Two different computing power allocation strategies for malicious miners, PAS and EAS, are investigated in terms of the profitability of FAW adversaries, the loss of victims, and the blockchain throughput. The results reveal that FAW adversaries can get more revenue under PAS when more victim pools are subjected to attack in both Bitcoin and Ethereum. If FAW adversaries adopt EAS and the number of victims vary from 1 to 12, they can get maximal revenue when attack 7 victims in Bitcoin. The blockchain throughput decreases significantly under PAS while it is almost unchanged under EAS with the increasing number of victims in both Bitcoin and Ethereum. Our work helps the design of countermeasures against FAW attack.