Double spending is the core problem faced by any cryp tocurrency where an

Double spending is the core problem faced by any cryp

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Double-spending is the core problem faced by any cryp- tocurrency, where an adversary holding $1 gives his $1 to two different users. Cryptocurrencies prevent double-spending by reaching consensus on an ordered log (“blockchain”) of transactions. Reaching consensus is difficult because of the open setting: since anyone can participate, an adversary can create an arbitrary number of pseudonyms (“Sybils”) [ 21 ], making it infeasible to rely on traditional consensus proto- cols [15] that require a fraction of honest users. Bitcoin [ 42 ] and other cryptocurrencies [ 23 , 54 ] address this problem using proof-of-work (PoW), where users must repeatedly compute hashes to grow the blockchain, and the longest chain is considered authoritative. PoW ensures that an adversary does not gain any advantage by creating pseudonyms. However, PoW allows the possibility of forks , where two different blockchains have the same length, and neither one supersedes the other. Mitigating forks requires two unfortunate sacrifices: the time to grow the chain by one block must be reasonably high (e.g., 10 minutes in Bitcoin), and applications must wait for several blocks in order to ensure their transaction remains on the authoritative chain (6 blocks are recommended in Bitcoin [ 7 ]). The result is that it takes about an hour to confirm a transaction in Bitcoin. This paper presents Algorand, a new cryptocurrency de- signed to confirm transactions on the order of one minute. The core of Algorand uses a Byzantine agreement protocol called BA that scales to many users, which allows Algo- rand to reach consensus on a new block with low latency and without the possibility of forks. A key technique that makes BA suitable for Algorand is the use of verifiable random functions (VRFs) [ 39 ] to randomly select users in a private and non-interactive way. BA was previously presented at a workshop at a high level [ 38 ], and a technical report by Chen and Micali [16] described an earlier version of Algorand. Algorand faces three challenges. First, Algorand must avoid Sybil attacks, where an adversary creates many pseudonyms to influence the Byzantine agreement protocol. Second, BA must scale to millions of users, which is far higher than the scale at which state-of-the-art Byzantine agreement protocols operate. Finally, Algorand must be re- 1
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silient to denial-of-service attacks, and continue to operate even if an adversary disconnects some of the users [30, 52]. Algorand addresses these challenges using several tech- niques, as follows. Weighted users. To prevent Sybil attacks, Algorand as- signs a weight to each user. BA is designed to guarantee consensus as long as a weighted fraction (a constant greater than 2/3) of the users are honest. In Algorand, we weigh users based on the money in their account. Thus, as long as more than some fraction (over 2/3) of the money is owned by honest users, Algorand can avoid forks and double-spending.
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  • Spring '19
  • NA
  • hash function, Cryptographic hash function, Algorand

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