The Halt Game: Sometimes Rewards Cannot Cover Expenses in the PoW-Based Blockchain

Proof-of-work (PoW) blockchain relies on incentive mechanisms to ensure the security and correctness of its underlying consensus protocol. Most research about it, based on a static model only considering coin-base rewards and transaction fee rewards, fails to accurately describe the complex real-world blockchain ecosystem. We propose a generic selfish mining attack applicable to arbitrary PoW blockchain systems and introduce a dynamic PoW blockchain incentive model. This model takes into account static basic rewards, dynamic whale rewards related to network protocol, and expenditures tied to players’ strategies. Unlike traditional incentive models that assume players continuously mine by default, we find players prefer to halt mining at the beginning of each mining cycle to reduce operational expenses and then resume mining at an appropriate time to enhance their rewards. We further prove players’ optimal strategy exists and it is determined by reward parameters. We implement a modified PoW blockchain system simulator and comprehensively validate these results using 256 full nodes in it of three mainstream PoW blockchains: Bitcoin, Ethereum 1.x, and Bitcoin Cash. We finally discuss the impact of different parameters on the security of PoW blockchain systems and propose practical mitigating measures for the mining halt.