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Colordag: An Incentive-Compatible Blockchain

Authors Ittai Abraham, Danny Dolev, Ittay Eyal, Joseph Y. Halpern

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Author Details

Ittai Abraham
  • Intel Labs, Haifa, Israel
Danny Dolev
  • The Hebrew University of Jerusalem, Israel
Ittay Eyal
  • Technion, Haifa, Israel
Joseph Y. Halpern
  • Cornell University, Ithaca, NY, USA

Funding

  • Dolev, Danny: Supported by the Federmann Cyber-Security Center in conjunction with the Israel National Cyber Directorate.
  • Eyal, Ittay: Supported by the Israel Science Foundation (grant No. 1641/18), Avalanche Foundation, and IC3.
  • Halpern, Joseph Y.: Supported in part by AFOSR grant FA23862114029, MURI grant W911NF-19-1-0217, ARO grant W911NF-22-1-0061, and a grant from the Algorand Centers of Excellence program managed by the Algorand Foundation.

Acknowledgements

We thank Roi Bar-Zur for comments on an early version of this manuscript, and the reviewers of the paper for their helpful comments.

Cite AsGet BibTex

Ittai Abraham, Danny Dolev, Ittay Eyal, and Joseph Y. Halpern. Colordag: An Incentive-Compatible Blockchain. In 37th International Symposium on Distributed Computing (DISC 2023). Leibniz International Proceedings in Informatics (LIPIcs), Volume 281, pp. 1:1-1:22, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2023)
https://doi.org/10.4230/LIPIcs.DISC.2023.1

Abstract

We present Colordag, a blockchain protocol where following the prescribed strategy is, with high probability, a best response as long as all miners have less than 1/2 of the mining power. We prove the correctness of Colordag even if there is an extremely powerful adversary who knows future actions of the scheduler: specifically, when agents will generate blocks and when messages will arrive. The state-of-the-art protocol, Fruitchain, is an ε-Nash equilibrium as long as all miners have less than 1/2 of the mining power. However, there is a simple deviation that guarantees that deviators are never worse off than they would be by following Fruitchain, and can sometimes do better. Thus, agents are motivated to deviate. Colordag implements a solution concept that we call ε-sure Nash equilibrium and does not suffer from this problem. Because it is an ε-sure Nash equilibrium, Colordag is an ε-Nash equilibrium and with probability 1-ε is a best response.

Subject Classification

ACM Subject Classification
  • Computing methodologies → Distributed computing methodologies
  • Theory of computation → Solution concepts in game theory
  • Security and privacy → Distributed systems security
Keywords
  • Game theory
  • incentives
  • blockchain

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