Voting Games to Model Protocol Stability and Security of Proof-of-Work Cryptocurrencies

We model the protocol stability and the security of proof-of-work cryptocurrencies using voting games. The first game, which we call the Rule Game, pertains to the scenario where the cryptocurrency miners engage in a voting procedure to accept or reject a proposal for change of the cryptocurrency protocol. The second game, which we call the Attack Game, refers to the scenario where a group of miners can form a coalition to launch a 51% attack on the system and consequently change a portion of the history of the underlying blockchain, thus defeating its promise of immutability. For the Attack Game, we define progressively granular notions of security all of which are based on the key concept of minimal winning coalitions from voting game theory. For both the Rule Game and the Attack Game, we show practical applicability of tools from voting game theory using a snapshot of real world data for Bitcoin. In particular, this highlights the fragile nature of the security of Bitcoin with respect to 51% attacks.