Mining fraud and its prevention

The principle of mining by a mining machine: connect to the mining pool, accept mining pool tasks, generate legal shares and send them to the mining pool. The mining pool distributes profits according to the proportion of the shares generated by a mining machine in the total pool shares during the generation of a block. For example, a mining pool has a pool fee of 1%, generates a block within 10 minutes, obtains 25 bitcoins, and has a total of 10,000 shares. A mining machine submitted 1,000 shares, accounting for 10%, so the profit that the mining machine can obtain = 25*10%*(1-0.01)=2.475

In order to earn more profits, some miners may use the following fraudulent methods to mine:

Fraudulent conditions : Mining blocks by yourself, and the mining pool adopts PPLNS mode

Fraud method : Use multiple mining machines to connect to multiple mining pools. When your own mining machine mines a block in mining pool A, do not send the result to mining pool A first. Connect all other mining machines to mining pool A, mine for 5-10 minutes, and then submit the block to the mining pool, dispersing all computing power to various mining pools.

Source of income : All mining machines are concentrated in mining pool A for 5-10 minutes, so that more shares are submitted and the distribution ratio becomes larger.

Risk : When the computing power is concentrated in mining pool A, if others mine blocks, the previously mined blocks will become invalid.

Monitoring method : A few minutes before an account submits a new block, the computing power increases significantly, and this phenomenon can be used for identification and prevention.

Under the current stratum protocol, the miner knows whether the share it generates is the HASH value of the final block, and other fraudulent mining methods can be generated around this point. Is it possible to make the miner unaware of whether nonce it generates is the HASH value of the new block? The answer is yes, but the miner algorithm, stratum protocol and mining pool software must be modified.

New block HASH confidentiality method:

1. The mining pool generates a key for each block, hashes the key, obtains an additional HASH value, and adds it to the block header;

2. The mining machine calculates HASH of the block header. Originally, the HASH value needed to be less than 2^256/(2^32*D), where D is the difficulty. Now it only needs to be less than 2^256/2^32 to obtain a legal share and submit it to the mining pool;

3. Mining pool verification, first verify that the BHASH submitted by the mining machine is less than 2^256/2^32, and then verify: private HASH value = BHASH + key HASH is less than 2^256/D. If so, the nonce and extraonce are available, and the block is broadcast in a normal way.

Because the mining machine does not know the key, it cannot calculate the private HASH value, so it does not know whether it is the HASH value of the block, but the mining pool knows it, thus achieving confidentiality.

Note: The new block HASH confidentiality method comes from the article [Analysis of Bitcoin Pooled Mining Reward Systems], which has not been verified. Please use it with caution.