It’s time to calculate the probability of success of block-hiding mining strategies in Bitcoin-like networks. These strategies involve building a secret branch of the block-tree and publishing it opportunistically, aiming to replace the top of the main branch and rip the reward associated with the secretly mined blocks. This paper identifies two types of block-hiding strategies and chart the parameter space where those are more beneficial than the standard mining strategy described in Nakamoto’s paper. The included analysis suggests a generalisation of the notion of the relative hashing power as a measure for a miner’s influence on the network. Block-hiding strategies are beneficial only when this measure of influence within Bitcoin-like networks exceeds a certain threshold.

Bitcoin’s consensus mechanism suffers from multiple weaknesses which are outlined in this research. The Bitcoin protocol, and Bitcoin-like network protocols sometimes, assume that miners publish newly found blocks immediately and that every miner shifts it’s mining effort to the top of the block-chain as soon as it is being made aware of a new block. However, these behaviours are not enforced and a necessary consequence of decentralisation is that every miner is free to mine as she sees fit. If a miner “breaks the rules” too aggressively, her blocks are in danger of being rejected by the network. However, some wiggle room exists
for miners to participate without strictly following the Bitcoin protocol. For example, a miner can choose not to share a newly found block and build a secret branch of the blocktree that she only reveals opportunistically.

This paper explores if and when non-standard mining strategies that involve building a secret branch of the block-tree and publishing it opportunistically(dubbed “block-hiding” strategies) give miners a higher probability of success in mining blocks in Bitcoin-like networks, compared to the standard strategy outlined in the Bitcoin protocol.