Can We Afford Integrity by Proof-of-Work? Scenarios Inspired by the Bitcoin Currency

Becker Jörg, Breuker Dominic, Heide Tobias, Holler Justus, Rauer Hans Peter, Böhme Rainer


Abstract
Proof-of-Work (PoW), a well-known principle to ration resource access in client-server relations, is about to experience a renaissance as a mechanism to protect the integrity of a global state in distributed transaction systems under decentralized control. Most prominently, the Bitcoin cryptographic currency protocol leverages PoW to 1) prevent double spending and 2) establish scarcity, two essential properties of any electronic currency. This paper asks the important question whether this approach is generally viable. Citing actual data, it provides a first cut of an answer by estimating the resource requirements, in terms of operating cost and ecological footprint, of a suitably dimensioned PoW infrastructure and comparing them to three attack scenarios. The analysis is inspired by Bitcoin, but generalizes to potential successors, which fix Bitcoin’s technical and economic teething troubles discussed in the literature.

Keywords
Bitcoin; Proof-of-Work; IT security; Green IT



Publication type
Conference Paper

Peer reviewed
Yes

Publication status
Published

Year
2012

Conference
Workshop on the Economics of Information Security (WEIS) 2012

Venue
Berlin, Deutschland

Book title
Workshop on the Economics of Information Security (WEIS 2012)

Start page
1

End page
17

Language
English

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