Delayed Proof of Work (dPoW): Protecting Against 51% Attacks
This article explains the Delayed Proof of Work (dPoW) system of Komodo Platform on how to protect against 51% Attacks..
The Byzantine Generals Problem
The Byzantine Generals Problem is an analogy in computer science used to describe the challenge of establishing and maintaining security on a distributed network of databases that have to be replicated and run in the same manner to achieve a common objective without fault. Blockchains have become a reality by solving this problem. To solve this problem, honest nodes (e.g. computers or other physical devices) need to be able to reach consensus despite the presence of dishonest nodes. This means a majority of nodes must establish a set of rules and come to agreement on how to enforce those rules on the network. The details of the problem definition may be found here.
Delayed Proof of Work (dPoW) Concept
Newly-formed blockchains are often vulnerable to outside attacks because they have little hashrate to protect themselves. The blockchain network simply isn't powerful enough to protect against attackers in especially early times.
Komodo can help overcome this risk with the delayed Proof of Work Blockchain Security mechanism to any UTXO-based blockchains by backing up a blockchain onto blockchains with much stronger hash power such as Bitcoin or Litecoin.
The process of storing backups of individual blocks onto another blockchain's ledger is called notarization. Komodo's decentralized network of 64 Notary Nodes all over the world carries out the technical work required to successfully complete notarizations. Each year, the 32 top-performing Notary Nodes are automatically re-elected to reward diligence and ensure continuity in the peer to peer network. The other 32 Notary Node positions are decided at the ballot by the Komodo community in an annual stake-weighted election.
Komodo's Blockchain Security Service is already demonstrating its functionality and efficacy through Notarization system conducted in 4 different regions in the World, namely AR (Asia and Russia), EU (European Region), NA (North America) and SH (Southern Hemisphere). Blockchains receiving Blockchain Security as a Service from Komodo include Verus Chain, Pirate Chain, Marmara Chain, SmartFi, Gleec, Einsteinium, and dozens of others.
There are many small- and mid-sized blockchain projects with plenty of potential, but also plenty of vulnerability. Komodo hopes to provide the protection necessary for these new projects—and the blockchain industry as a whole—to grow and prosper. Every project deserves the opportunity to succeed or fail on its own merit, without outside interference from malevolent actors.
However, it’s difficult for small blockchain projects to develop a peer to peer network powerful enough to ward off attackers. Cryptocurrency mining on new blockchains is a risky allocation of resources, so many crypto miners prefer to put their machines to work on established blockchains. That way, they are more likely to see a return on their investment.
As more and more miners choose to mine reputable blockchains, like Bitcoin, Litecoin, larger networks are developing an insurmountable lead on hashrate. And a large hash rate is what ensures the security of a blockchain. Litecoin, of course, remains one of the world’s strongest network.
While the environmental concerns surrounding this quantity of energy usage of Proof of Work are important, that discussion is outside the scope of this article. The point is that the Bitcoin or Litecoin network is insanely powerful and will not be surpassed at any point in the foreseeable future.
So rather than dedicating resources to increasing the hash rate of your own blockchain, why not simply recycle the enormous hashrate that the other networks already have?
Examples of 51% Attacks in the Past
In the blockchain industry, security is the most important aspect for any project or business. If a blockchain isn’t secure, it’s simply a matter of time before it gets hacked.
Over the last few years, there have been a number of successful attacks recently that demonstrate this point. This includes some major projects that sit in the top 100 coins according to market capitalization value. Bitcoin Gold, Ethereum Classic, and Verge, just to name a few, have all fallen victim to hackers.
Here's a summary of recorded 51% attacks and the amount of losses incurred in each one.
- June 2013: Feathercoin (FTC) attacked for ~$1,400 in losses.
- July 2013: Terracoin (TRC) attacked for unknown losses.
- August 2016: Krypton Network (KR) attacked for ~$4,200 in losses.
- April 2018: Electroneum (ETN) attacked for unknown losses.
- April 2018: Verge (XVG) attacked for ~$1.1 Million in losses.
- May 2018: Monacoin (MONA) attacked for ~$90,000 in losses.
- May 2018: Verge (XVG) attacked again for ~$1.75 Million in losses.
- May 2018: Bitcoin Gold (BTG) attacked for ~$18 Million in losses.
- June 2018: ZenCash (ZEN) attacked for ~$550,000 in losses.
- June 2018: Litecoin Cash (LCC) attacked for unknown losses.
- September 2018: FLO Blockchain (FLO) attacked for ~$27,500 in losses.
- September 2018: Pigeoncoin (PGN) attacked for ~$15,000 in losses.
- November 2018: Aurum Coin (AU) attacked for ~$500,000 in losses.
- December 2018: Vertcoin (VTC) attacked for ~$100,000 in losses.
- January 2019: Ethereum Classic attacked for ~$1.1 Million in losses.
As you can see from the figures, 51% attacks are a great problem. And it's not just smaller blockchains that are vulnerable-- almost every blockchain project is at risk.
To add an impenetrable security layer and mitigate the threat of a 51% attack, Komodo uses the delayed Proof of Work (dPoW) security mechanism.