Blockchain Amplification Attack

Strategies related to the blockchain concept of arbitrage or front/back running, create strong economic incentives for network nodes to reduce latency. Modified nodes, that minimize transaction validation and neglect to filter invalid transactions in the Ethereum peer-to-peer (P2P) network, introduce a novel attack vector---a Blockchain Amplification Attack. An attacker can exploit those modified nodes to amplify invalid transactions thousands of times, posing a security threat to the entire network. To illustrate attack practicality in the current Ethereum main network, we 1) identify thousands of similar attacks in the wild, 2) mathematically model the propagation mechanism, 3) empirically measure model parameters from our monitoring nodes, and 4) compare the performance with other existing Denial-of-Service (DoS) attacks through local simulation. We show that an attacker can amplify network traffic at modified nodes by a factor of 3,600, and cause economic damages of 13,800 times the amount needed to carry out the attack. Despite these risks, aggressive latency reduction may still be profitable to justify the existence of modified nodes. To assess this trade-off, we 1) simulate the transaction validation process in a local network and 2) empirically measure the latency reduction by deploying our modified node in the Ethereum test network. We finally provide mitigation strategies against the blockchain amplification attack.