As the second largest cryptocurrency by market capitalization and today’s
biggest decentralized platform that runs smart contracts, Ethereum has received
much attention from both industry and academia. Nevertheless, there exist very
few studies about the security of its mining strategies, especially from the
selfish mining perspective. In this paper, we aim to fill this research gap by
analyzing selfish mining in Ethereum and understanding its potential threat.
First, we introduce a 2-dimensional Markov process to model the behavior of a
selfish mining strategy inspired by a Bitcoin mining strategy proposed by Eyal
and Sirer. Second, we derive the stationary distribution of our Markov model
and compute long-term average mining rewards. This allows us to determine the
threshold of computational power that makes selfish mining profitable in
Ethereum. We find that this threshold is lower than that in Bitcoin mining
(which is 25% as discovered by Eyal and Sirer), suggesting that Ethereum is
more vulnerable to selfish mining than Bitcoin.

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