Debunking the Empty Block Attack

What is the Empty Block Attack?

The empty block attack is one where a majority of mining power would be directed at mining only empty blocks and rejecting non-empty blocks. These miners would essentially execute a soft-fork where all non-empty blocks would be rejected. Given that they have a majority of hashing power on the network, so the thinking goes, they will eventually get the longer chain even if other miners were to mine non-empty blocks. If only empty blocks are being mined, all activity on the network would stop and so, the thinking goes, Bitcoin would be killed.

Pool-based Majority is a Non-starter

Most mining power is gathered into pools and each pool operator competes with other pool operators for the business of mining equipment owners. If China were to somehow be able to take control of pools and execute this attack, most mining equipment owners would simply leave. Why? Because the pool mining empty blocks will generate less revenue than a pool mining normal blocks. Currently, the block subsidy is 6.25 BTC and fees are around 0.75 BTC. Using a pool outside of China (such as Slushpool) would give them 11% more revenue. In other words, they would have to give up 11% of revenue in a thin-margin business, a non-starter.

Direct Mining Equipment Acquisition is Really Hard

The other scenario is direct acquisition of the mining equipment. This, again, is not a cheap scenario. There are two ways a government can get their hands on mining equipment, either seizing it or producing it themselves.

What happens if a Country has Majority Hash Rate

But let’s leave aside this concern and give the Bitcoin critics the advantage here. Suppose a country somehow manages to get 51% of the mining hash power, whether through manufacturing it themselves,buying or seizing it on the market. What would happen then?

Empty vs. Normal Chain War

At this point, Bitcoin would fork: one empty blockchain and one normal blockchain. The normal one would have transactions but less hashing power, so would run slower. The empty one would have no transactions but more hashing power so would run faster. They would be separate chains and every economically significant node would follow the normal blockchain as it’s the only one that’s actually processing transactions.

Conclusion

Given all of these realities, a nation-state would have to weigh out these scenarios and determine if it’s worth it. Even with unlimited money, which they don’t have, and majority control of new mining equipment manufacturing world-wide, which is highly unlikely, the probability of failure, that of a decentralized minority forming, is really high. Make no mistake, a failure of this magnitude would be a massive black eye to their reputation and prestige at home and abroad. This is the sort of humiliation that government officials avoid at all costs.

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Jimmy Song

Jimmy Song

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Bitcoin Educator, Developer and Entrepreneur. Book: https://amzn.to/2RSlnTb PGP Fingerprint: C1D7 97BE 7D10 5291 228C D70C FAA6 17E3 2679 E455