Abstract
In this paper, we revisit the mining strategies in Proof of Work
based cryptocurrencies and propose two strategies, which we call smart and smarter mining, that in many cases strictly dominate honest mining.
In contrast to other known attacks, such as selfish mining, which induce
zero-sum games among the miners, the strategies proposed in this
paper increase miners' profit by reducing their variable costs (i.e., electricity).
Moreover, the proposed strategies are viable for much smaller miners
than previously known attacks and, surprisingly, an attack launched by
one miner can be profitable for all other miners as well.
While saving electricity is very encouraging for
the environment, it may affect the coin's security.
The smart and smarter mining strategies expose the coin to under 50%
attacks and this vulnerability might only grow when new miners join
the coin in response to the increased profit margins induced by these
strategies.