Abstract

Selfish mining is a subtle but serious vulnerability in proof-of-work blockchains where a miner can gain more rewards than their fair share by strategically withholding and releasing blocks. This behavior breaks the assumption that all miners follow the honest protocol, showing that Bitcoin’s original consensus was not fully incentive-compatible. In this article, we explore the fundamentals of selfish mining – how it works, why it threatens blockchain security, and how it has driven the evolution of new protocols. We discuss early “band-aid” fixes (from penalizing hidden blocks to uncle rewards) and why they fell short. Finally, we highlight how Kaspa’s GHOSTDAG protocol offers a groundbreaking solution that makes selfish mining virtually pointless, by embracing a blockDAG structure that includes all parallel blocks. The goal is a clear, step-by-step understanding of the selfish mining problem and how modern blockchain designs address it, in an accessible way for all readers.

🚧 Introduction: The Blockchain Mining Game

In a proof-of-work blockchain like Bitcoin, miners compete to add new blocks and earn rewards. The protocol assumes miners will behave honestly – meaning whenever a miner finds a block, they immediately broadcast it to the network and build on the longest chain they know. This honest strategy is supposed to be the best way to maximize one’s rewards. Under ideal conditions, if a miner has X% of the total hash power, they should mine roughly X% of the blocks (this is the fair share or proportion of rewards). The security of Nakamoto’s consensus hinges on the idea that no minority of miners can consistently cheat the system; only a 51% attacker (a majority of hash power) could overpower the rest and rewrite the chain.

However, reality isn’t so simple. What if a miner (or a pool of miners) tries to act strategically rather than honestly? Cryptographic protocols must account for rational actors who seek to maximize their own gain, even if it undermines the protocol’s rules. This brings us to the concept of selfish mining – a deviant strategy where a miner withholds newly found blocks instead of broadcasting them, aiming to get an edge over others. Selfish mining exploits the way the network selects the “main chain” and can lead to outcomes where the selfish miner earns more than their fair share of rewards. This was a startling discovery for the blockchain community: it showed that “majority is not enough” – even a minority could potentially undermine the protocol’s fairness and security.

In the sections below, we will break down how selfish mining works, why it’s a real problem that demands a solution, and how the blockchain world responded. We’ll then delve into GHOSTDAG – the innovative approach used by Kaspa – to see how it fundamentally changes the game to defeat selfish mining. Let’s start by understanding the selfish mining attack step by step.

🔍 What is Selfish Mining? (The Attack Explained)

Selfish mining is a strategy where a miner (or colluding group of miners) does not immediately publish a block they find. Instead, they keep it secret (maintaining a private chain) and continue mining to get ahead of the public chain. The goal is to secretly create a lead over honest miners, then reveal the secret blocks at the right moment to invalidate the honest miners’ work. Here’s a simplified step-by-step scenario of a selfish mining attack:

1. Miner finds a block and withholds it: The selfish miner discovers a new block but does not broadcast it. At this point, the public network is unaware of this block, so the public chain remains one block shorter than the selfish miner’s private chain. The selfish miner now has a lead of 1 block (their private chain vs. the public chain). They immediately start mining on top of their secret block to extend their private chain

2. Honest miners find a block: Before the selfish miner can find a second block, an honest miner finds a block and broadcasts it. Now the public chain has caught up in length. The situation is a tie: the selfish miner’s hidden chain and the public chain are of equal length. If nothing else changes, the network will eventually hear of both chains. Typically, when two blocks are found at near the same time, the network temporarily has a fork (two tips). Honest miners will then choose one tip to mine on (often the first seen). At this moment, the selfish miner’s advantage is in jeopardy – if the public chain gets another block first, the selfish chain will fall behind and their secret block will become worthless.

3. Selfish miner tries to extend the lead: If the selfish miner is lucky enough to find another block on their private chain before the public chain finds the next one, they now have a private chain 2 blocks long, versus the public’s 1 block. This is the ideal scenario for the attacker. The selfish miner has a lead of one block (length 2 vs 1).

4. Releasing the private chain: The selfish miner now publishes their secret blocks to the network. Since they have a chain two blocks longer than the public chain, the honest nodes will see this as the new “longest chain” and switch to it, abandoning the old public tip. The block that the honest miner found (which was at the tip of the public chain) becomes orphaned – it is dropped from the main chain history. All the work that went into that honest block (and any blocks built on it) is wasted.

5. Outcome: The selfish miner successfully orphaned an honest block and extended the main chain with their own two blocks. They get the rewards for those 2 blocks. The honest miner who mined the now-orphaned block gets nothing for that block. In effect, the selfish strategy allowed the attacker to win 2 rewards vs. 0 for the honest network in that round, even though the selfish miner might have, say, only 30% of the hash power. By withholding and strategically releasing blocks, the selfish miner caused honest miners to waste effort on a block that didn’t end up on the main chain. Over time and many such cycles, this can give the selfish mining pool a greater share of blocks (and rewards) than their fraction of the hash power would normally entitle them to

   

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Illustration of a selfish mining attack: The selfish miner’s private chain (red blocks) overtakes the public chain (blue blocks) by withholding blocks. Once the selfish miner has a lead, they reveal their hidden blocks, causing the honest miners’ latest block (blue) to become orphaned and excluded from the main chain. In this example, the selfish miner gained two block rewards while the honest network’s work on the orphaned block went to waste.

In practice, implementing selfish mining involves managing several scenarios (what if the honest network finds two blocks in a row? What if there’s a tie at multiple heights? etc.). The seminal paper by Eyal and Sirer provides a full strategy and state-machine for selfish mining. The key takeaway is that if the selfish miner (or pool) has a sufficiently large fraction of the network’s hash power, the gains from this strategy outweigh the risks in the long run. The selfish miner will capture more than their fair share of blocks on average, which incentivizes rational miners to join the selfish pool (since it’s more profitable). This can lead to a dangerous snowball effect: the selfish pool grows larger as others join it for better payouts, potentially until it becomes a majority – at which point the blockchain is effectively controlled by that group.

⚠️ Why Is Selfish Mining a Serious Problem?

At first glance, selfish mining might seem like an “academic” problem – after all, pulling it off requires significant hash power and coordination. However, it has very real implications for the health of a blockchain network:

• Undermines Fairness and Security: Bitcoin’s security model assumes miners follow the protocol and that a 51% attack is the only major threat. Selfish mining showed that a much smaller group (even ~30% or less of the hash power) could gain an outsized influence on the blockchain. For example, with certain network conditions, a miner with only 1/3 of the hash power could end up mining >50% of the blocks by using selfish tactics. This breaks the proportional fairness principle of Nakamoto consensus and challenges the idea that “minority miners can’t win.” It also means the safety margin (how much power an attacker needs to threaten the chain) is lower than believed, which is alarming for decentralization.

• Incentive to Centralize: If selfish mining yields more profit, rational miners have an incentive to join the selfish mining pool or adopt the strategy themselves. This behavior can lead to centralization, where one big pool or a cartel of miners dominates the mining process. That directly contradicts the goal of a decentralized network. In the worst case, it could spiral such that the selfish miners become a majority, effectively controlling the blockchain (making double-spend attacks or censorship easier for them).

• Wasted Resources and Higher Orphan Rates: Selfish mining deliberately causes honest blocks to be orphaned. Orphaned (stale) blocks represent wasted computational effort and network bandwidth. If selfish mining were to be widely practiced, the network would see a lot more forks and stale blocks, meaning a lot of mining power is going into blocks that don’t contribute to the confirmed ledger. This reduces the overall efficiency of the network. Moreover, high orphan rates can actually deteriorate security, because it implies the network is often in disagreement about the latest block, making it easier for any attacker to slip in alternative histories (the chain becomes “looser” in consensus).

• Advantages for Well-Connected Miners: An important parameter in selfish mining is γ (gamma) – the probability that when a selfish miner and an honest miner publish competing blocks at the same time, the selfish miner’s block wins (propagates faster). Well-connected miners (with fast nodes, good network latency) can have a higher γ, meaning their blocks are more likely to win in a tie. Selfish mining amplifies the advantage of miners with better connectivity. This is a centralization concern: miners in geographically favorable or infrastructure-rich locations could consistently beat others, driving a network inequality beyond just hash power.

  

In summary, selfish mining is a real threat because it breaks the assumption that following the protocol is always the best strategy. It proves that “honest != optimal” under certain conditions. The long-term effect of selfish mining, if left unaddressed, would be a blockchain that trends toward centralization (as winning coalitions form) and suffers in security and performance due to frequent forks. This is why researchers and developers have been motivated to find ways to eliminate or mitigate selfish mining. As one expert put it, without proper countermeasures, “outdated [blockchain] design leads to exploitable systems,” and selfish mining is one such exploit that needed to be tackled at the design level (not just by miner goodwill).

🩹 Attempts to Fix Selfish Mining (Band-Aid Solutions)

Since the revelation of selfish mining, several fixes have been proposed or implemented to curb this exploit. Many of these can be seen as band-aids – they try to patch the problem within the traditional blockchain paradigm (longest-chain wins) without altering it fundamentally. Here are a few notable approaches and why they only partially address the issue:

• Penalizing Withholding or Fast Switching: One idea is to tweak the consensus rules to penalize miners who don’t publish blocks promptly. For example, the Bitcoin community discussed modifying the tie-breaking rules. In the default protocol, if two chains of equal length are seen, an honest miner will just choose the first one they saw (essentially random). If instead, the rule favored the chain that did not have a recent fork, it could discourage selfish behavior. Eyal and Sirer themselves suggested a protocol change that would raise the threshold at which selfish mining is profitable – their modification aimed to protect the network as long as the selfish miners control < 25% of the hash power. This was better than the status quo (where even smaller pools could profit), but it’s still a partial measure (a determined attacker with >25% could still succeed). Moreover, detecting and enforcing “block withholding” penalties is tricky – how can the protocol distinguish between a malicious delay and just network latency? Over-penalizing could hurt honest miners in slow networks.

• Incentivizing Publication (Uncle Rewards): Another approach is to reduce the reward advantage of withholding blocks. Ethereum famously took this route by adopting a variant of the GHOST protocol with “uncle” blocks. In Ethereum (pre-merge, when it was PoW), if a miner’s block doesn’t make it into the main chain in time (i.e., becomes stale), it can still be included as an uncle in a later block and earn a partial reward. This means honest miners who produce blocks that just miss out are not completely deprived of reward, which limits the selfish miner’s edge. The network overall sees less wasted work because even stale blocks contribute something. However, uncle rewards are a double-edged sword: they also lower the risk for selfish miners. In Bitcoin, if your secret block gets orphaned, you get 0 reward (a big risk). In Ethereum, that orphaned block would still give you, say, ~uncle reward, softening the blow. So the incentive to try selfish mining is reduced but not eliminated – a selfish miner doesn’t “lose everything” if caught, which could make the strategy less risky (though also less rewarding). Research has shown that including uncle blocks does improve the situation and nearly nullifies the selfish mining advantage under most conditions. Yet, it’s not a full cure; it’s more of a balancing act to make the playing field more even. (Ethereum eventually moved to Proof of Stake, but that’s another story.)

• Limiting Pool Size & Sharing Protocols: Some community discussions have suggested social or technical measures to discourage large mining pools (since a single miner with <10% probably can’t profit from selfish mining, but a pool with 30% could). Ideas like P2Pool (a decentralized mining pool structure) or discouraging centralized pools were floated. There were also proposals for “honest mining” agreements – essentially encouraging miners to stick to protocol for the good of the network. However, these are not enforceable solutions, and history shows miners will follow profit incentives unless the protocol is designed to align incentives correctly. Relying on altruism or off-chain coordination is risky and does not guarantee security.

• Detection and Punishment Systems: Some academic works focus on detecting selfish mining activity (for example, monitoring unusual rates of orphaned blocks). If selfish miners can be detected, they could be punished by the community or via a hard fork that slashes their rewards retroactively. But detection is not straightforward – a clever selfish miner can make their activity statistically hard to distinguish from normal variance. Furthermore, any on-chain punishment scheme could be gamed or might accidentally punish innocents if there’s a false positive.

In summary, these measures provided some relief. Uncle block rewards (as in Ethereum) significantly reduced the profitability of selfish mining by ensuring less wasted work. Protocol tweaks can raise the bar for an attacker (from near-0% to maybe 25% hash power needed). But none of these fully solve selfish mining in a traditional blockchain – they either add new complexity/trade-offs, or still leave scenarios where a determined, well-resourced attacker can gain an unfair advantage. They are “band-aids” in the sense that the core issue (the longest-chain rule inherently creates a competitive race that can be gamed) remains. What was really needed was a more fundamental rethinking of how blocks are accepted and ordered in a distributed ledger.

✨ Enter GHOSTDAG: A Modern Solution in Kaspa

It became clear to researchers that if the problem is rooted in the blockchain’s design (single longest chain wins, others are orphaned), then perhaps one must change that design to truly fix selfish mining. This is where blockDAG protocols come in, and specifically Kaspa’s GHOSTDAG. Instead of a single chain of blocks, Kaspa’s ledger is a Directed Acyclic Graph of blocks (a blockDAG), where blocks can be created in parallel and reference multiple previous blocks (parents) rather than just one. The GHOSTDAG protocol (a successor to earlier ideas like PHANTOM and Ethereum’s Ghost) is the secret sauce that orders this DAG of blocks in a secure way. Here’s how GHOSTDAG tackles selfish mining at its root:

• All Blocks Are Accepted: In a blockDAG, when miners find blocks at the same time, none of them are thrown away. Unlike a blockchain where only one branch can win and the rest become orphans, GHOSTDAG allows parallel branches to coexist and eventually merges them into a single consensus order. Every valid block that honest miners produce will be integrated into the history (unless it’s genuinely in conflict with another transaction, which is rare and handled by ordering). This means the scenario selfish miners rely on – causing others’ blocks to be orphaned – is largely eliminated. If a selfish miner withholds a block and an honest miner finds a block at the same height, in GHOSTDAG both blocks will still be included in the DAG. The selfish miner doesn’t gain by orphaning the honest block, because the honest block isn’t orphaned at all! At worst, the selfish miner’s block and the honest block will be in parallel, and the consensus will later sort out their order.

• No “Longest Chain” Race: GHOSTDAG does not use the longest-chain rule. Instead, it uses a more sophisticated rule to order blocks (sometimes described as choosing the “heaviest subtree” or using a k-cluster of well-connected blocks). The details are complex, but the intuition is: honest miners who publish quickly will see their blocks referenced by many others and they form the backbone of the DAG (the cluster of mutually-aware blocks). A selfish miner who withholds blocks is not contributing to this cluster while in hiding. When they eventually publish, their blocks are seen as somewhat off to the side (they won’t be in the “cluster” of blocks that were chaining together in real time). Thus, although their blocks are accepted, they do not help the attacker dominate the chain order. In fact, withholding blocks tends to hurt the attacker’s position in GHOSTDAG’s ordering – their blocks might be ordered later than they’d like, and they can’t overwrite a bunch of honest blocks because those honest blocks have already connected and confirmed each other.

• Selfish Mining Becomes Pointless: Because of the above reasons, the incentive to even attempt selfish mining disappears. If you can’t cause others’ blocks to be wasted, you have no way to get an outsized reward share. At best, you’d just delay your own reward and risk slowing down your blocks’ inclusion. As Kaspa’s team puts it, “honest blocks are organically arranged” in the consensus, and an attacker who withholds blocks will only find themselves excluded from the winning cluster of blocks. The outcome is that a selfish miner gains nothing by hiding blocks – in fact, they might lose out because while they were hiding, the rest of the network moved on. GHOSTDAG welcomes all blocks (so the network throughput increases with more parallelism) and in doing so, it removes the weapon that selfish miners used: the ability to play “hide-and-seek” with blocks. One analysis by Dr. Yonatan Sompolinsky (one of the creators of GHOSTDAG) notes that while a DAG-based protocol might give an attacker more flexibility in timing (since blocks aren’t immediately orphaned), it also makes the attack “much less profitable” overall, because honest miners aren’t as harmed by the delay. In short, any small advantage the selfish miner might gain in a DAG is washed out by the fact that the rest of the network also isn’t losing much from the attack.

• Higher Block Rates, Same Security: An added benefit – because GHOSTDAG handles parallel blocks so well, Kaspa can safely have one block per second or more, vastly higher than Bitcoin’s 10 minutes. Even with such high throughput (which normally would cause lots of collisions/forks in a normal chain), the security doesn’t degrade. No blocks are wasted, so the system can be both fast and secure. This shows that dealing with selfish mining wasn’t just about fairness, it also unlocked the ability to scale. Traditional blockchains had to keep block rates low partly to avoid too many forks (which selfish miners could exploit). Kaspa’s approach turns this on its head – high block rates with many parallel blocks actually strengthen the network’s throughput without giving an opening to selfish miners. It’s a win-win: honest participation is maximized and no “tricks” can give a cheating miner an edge.

  

To put it succinctly, GHOSTDAG and blockDAGs fix the root cause of selfish mining. Instead of patching the symptoms (like giving a consolation prize to orphaned blocks or tweaking chain selection slightly), Kaspa’s protocol redesigns how consensus works so that the concept of a selfish mining attack doesn’t even make sense anymore. There’s no longer a single chain to secretly extend and no way to orphan a competitor’s block – all blocks contribute to the ledger. This is why experts say “selfish mining is a relic of old blockchain thinking”. Modern protocols like Kaspa’s demonstrate that Proof-of-Work can evolve to be fast, fair, and secure without the drama of such attacks. It’s a fundamental shift: from a competitive race where winners take all, to a more inclusive network where cooperation (following the protocol honestly) is truly the best strategy for everyone.

🔗 Conclusion: Upgrading Blockchain Consensus for Good 🏁

Selfish mining taught the blockchain community a valuable lesson in game theory and protocol design. It exposed that assumptions of honest behavior are not enough – we must design systems where being honest is also the most profitable course of action for any rational participant. Early blockchains left a loophole: the longest-chain rule created a small incentive misalignment that a clever miner could exploit. The research and debates since 2013 have revolved around bringing incentives back in line – through protocol tweaks, incentives adjustments, and ultimately new paradigms like blockDAG.

Kaspa’s GHOSTDAG stands out as a landmark solution because it doesn’t just put a band-aid on the problem; it eliminates the root cause by changing how consensus works. By accepting all parallel blocks and ordering them fairly, it ensures there’s no reward in trying to exclude others’ blocks. In a GHOSTDAG network, the rational strategy is the honest strategy, which is exactly how it should be. The network becomes more robust – decentralization is enhanced (no single miner or pool can easily dominate by withholding blocks), and security is strengthened (no more subtle exploits to get more than your fair share). It’s a shining example of how we can upgrade our thinking in blockchain design: rather than sticking to the old chain model with “patches,” embrace new structures that inherently solve the old problems.

For blockchain enthusiasts and professionals, the journey of selfish mining research underscores the importance of continuous innovation. The blockchain trilemma (decentralization, security, scalability) was once thought to block certain improvements, but protocols like GHOSTDAG show that with creativity and rigorous research, we can break old limits. Proof-of-Work networks don’t have to be slow or fragile – they can evolve to be fast and fair without compromising their trustless nature.

In the end, selfish mining has gone from a frightening theoretical attack to a solved issue (at least on networks that adopt these modern protocols). It’s a reminder that the crypto space is still young and growing: when faced with “drama” or exploits, the answer is to innovate our way out. As the Kaspa community would say, it’s time to leave selfish mining and other relics of the past behind, and move forward with consensus mechanisms built for the future. 🏆💪 (Victory for secure and fair distributed systems!)

Sources:

Selfish mining was first identified by Eyal and Sirer arxiv.org; subsequent analysis and optimal strategies lowered the threshold of attack profitability kasmedia.com. Ethereum’s adoption of GHOST protocol and uncle rewards mitigated some issues researchgate.net. Kaspa’s blockDAG with GHOSTDAG consensus provides a comprehensive fix by including all blocks and neutralizing block-withholding attacks kaspa.org. Interviews and writings from Kaspa researchers reinforce how blockDAG designs make selfish mining unprofitable hackernoon.com. The continual evolution of these protocols exemplifies how the blockchain community addresses vulnerabilities through research and innovation.