Cryptocurrency project Horizen has proposed a penalty system which would fine miners for delayed block submission. This, they believe, would help prevent 51% attacks that have affected some cryptocurrency projects.
51% attacks allow miners to double spend coins and generate a profit by selling these “doubled” coins on exchanges.
Horizen to modify satoshi consensus to enhance protection against 51% attacks
Horizen, which was previously known as Zencash, suffered a 51% attack earlier this year which saw an exchange losing over $500,000 in the attack.
This type of attack occurs when a single malicious miner is in control of more than 51% of the computing power of a particular network and then recording some false transactions on the system while in control.
Horizen released a paper yesterday, October 10 where it proposed a penalty system that it believes would prevent the 51% attack from happening.
The team will introduce a penalty in the form of a block acceptance delay in relation to the amount of time the block has been hidden from the public blockchain.
The delay penalty could be implemented due to the fact that for a 51% attack to happen, a miner would have to produce blocks in secret before posting them to the blockchain.
By fining the miners for delayed submission, Viglione believes that it would cost them so much more to launch such an attack on a network.
The cryptocurrency world has become aware of this type of attack as five cryptocurrencies suffered it earlier in June. Viglione stated that since 51% attack damages the confidence in the security of cryptos, it projects a negative image of the entire crypto space.
He added that the project developers started working on this solution following the attack on their network. He believes that by making it costly, it would not be easy for miners to launch such an attack again.
Longest chain rule to be modified
For the delayed blocks penalty to be implemented, a new code will be released that would modify the longest chain rule on the system.
Viglione explained that if a block that is expected to contain five blocks or more doesn’t get submitted on time, then a penalty would be introduced. The penalty means that the miner would have to increase the number of blocks to be submitted quadratically.
Unless that is done, the transactions would not be accepted onto the blockchain, he explained. Doing that would drastically decrease the chances of a 51% attack happening.
He added that due to the nature of Horizen’s architecture, the penalty can only occur when a miner is malicious.
He also stated that the network has an average block find the time of 2 and a half minutes, while their maximum latency to broadcast anywhere in the world is around 2 seconds. This makes it almost impossible to be 5 blocks behind legitimacy.
He, however, mentioned that this could cause a network partition to happen on their blockchain. This is because multiple chains of blocks would be competing to be viewed as the honest chain.
To solve this issue, Viglione explained that miners would be allowed to vote for chains that are legit.
Horizen doesn’t want the network splits to be permanent, thus they are looking to make the penalties decrease on the accepted chain.
The paper released by the firm further pointed out that the delay function could also consider the current mining difficulty to provide better protection for coins that have low hashrate.
Skepticism still exists about the proposal
Horizen concluded in its paper that public blockchains need to upgrade consensus rules to ensure that it is more costly to spend with double spending. Viglione added that the specifics of the penalty can be altered at any time, depending on the conditions of the blockchain.
There has been skepticism about this development though. Ethereum proof-of-stake researcher Vlad Zamfir stated that even though he hasn’t looked into the proposal, he’s not sure it would perform miracles.
Consensus researcher Emin Gur Sirer meanwhile believes that the changes are subtle and difficult to grasp.
Despite all these, Viglione is confident that the protocol would work as it should and would set the template for the cryptocurrency world.