Stake Shift in Major Cryptocurrencies: An Empirical Study | SpringerLink Skip to main content This service is more advanced with JavaScript available Advertisement Hide Search SpringerLink Search Home Log in Financial Cryptography and Data Security International Conference on Financial Cryptography and Data Security FC 2020: Financial Cryptography and Data Security pp 97-113 | Cite as Stake Shift in Major Cryptocurrencies: An Empirical Study Authors Authors and affiliations Rainer Stütz Peter Gaži Bernhard Haslhofer Jacob Illum Conference paperFirst Online: 18 July 2020 713 Downloads Part of the Lecture Notes in Computer Science book series (LNCS, volume 12059) Abstract In the proof-of-stake (PoS) paradigm for maintaining decentralized, permissionless cryptocurrencies, Sybil attacks are prevented by basing the distribution of roles in the protocol execution on the stake distribution recorded in the ledger itself. However, for various reasons this distribution cannot be completely up-to-date, introducing a gap between the present stake distribution, which determines the parties’ current incentives, and the one used by the protocol. In this paper, we investigate this issue, and empirically quantify its effects. We survey existing provably secure PoS proposals to observe that the above time gap between the two stake distributions, which we call stake distribution lag, amounts to several days for each of these protocols. Based on this, we investigate the ledgers of four major cryptocurrencies (Bitcoin, Bitcoin Cash, Litecoin and Zcash) and compute the average stake shift (the statistical distance of the two distributions) for each value of stake distribution lag between 1 and 14 days, as well as related statistics. We also empirically quantify the sublinear growth of stake shift with the length of the considered lag interval. Finally, we turn our attention to unusual stake-shift spikes in these currencies: we observe that hard forks trigger major stake shifts and that single real-world actors, mostly exchanges, account for major stake shifts in established cryptocurrency ecosystems. Keywords Cryptocurrencies Blockchain Stake shift Proof of stake  This is a preview of subscription content, log in to check access. Notes Acknowledgments We thank Patrick McCorry for reviewing and commenting on the final draft, and our AIT colleagues Hannes Koller and Melitta Dragaschnig for insightful discussions regarding the Apache Spark implementation. Work on this topic is supported inter alia by the European Union’s Horizon 2020 research and innovation programme under grant agreement No. 740558 (TITANIUM) and the Austrian FFG’s KIRAS programme under project VIRTCRIME (No. 860672). Supplementary material Open image in new window A Additional Figures In this section, we provide additional plots for visual inspection of our findings reported in Sect. 5. Figure 5 depicts the evolution of stake shifts for Bitcoin (BTC), Bitcoin (BCH), Litecoin (LTC), and Zcash (ZEC).Open image in new window Fig. 5.Stake shift for all analyzed cryptocurrencies (stake distribution lag \(\varLambda \): 1, 7, and 14 days). (Color figure online) References 1. Nakamoto, S.: Bitcoin: a peer-to-peer electronic cash system (2009)Google Scholar 2. Digiconomist: Bitcoin energy consumption index. https://digiconomist.net/bitcoin-energy-consumption. Accessed 15 Sept 2019 3. Chen, J., Micali, S.: ALGORAND. arXiv e-prints. arXiv:1607.01341 (2016) 4. Kiayias, A., Russell, A., David, B., Oliynykov, R.: Ouroboros: a provably secure proof-of-stake blockchain protocol. In: Katz, J., Shacham, H. (eds.) CRYPTO 2017. LNCS, vol. 10401, pp. 357–388. 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In: 2019 IEEE Symposium on Security and Privacy (SP), Los Alamitos, USA, pp. 677–694. IEEE Computer Society (2019)Google Scholar Copyright information © International Financial Cryptography Association 2020 Authors and Affiliations Rainer Stütz 1 Email authorView author's OrcID profile Peter Gaži 2 Bernhard Haslhofer 1 View author's OrcID profile Jacob Illum 3 1.AIT Austrian Institute of TechnologyViennaAustria 2.IOHKHong KongChina 3.ChainalysisNew YorkUSA About this paper CrossMark Cite this paper as: Stütz R., Gaži P., Haslhofer B., Illum J. (2020) Stake Shift in Major Cryptocurrencies: An Empirical Study. In: Bonneau J., Heninger N. (eds) Financial Cryptography and Data Security. FC 2020. Lecture Notes in Computer Science, vol 12059. Springer, Cham. https://doi.org/10.1007/978-3-030-51280-4_7 First Online 18 July 2020 DOI https://doi.org/10.1007/978-3-030-51280-4_7 Publisher Name Springer, Cham Print ISBN 978-3-030-51279-8 Online ISBN 978-3-030-51280-4 eBook Packages Computer Science Computer Science (R0) Buy this book on publisher's site Reprints and Permissions Personalised recommendations Cite paper How to cite? .RIS Papers Reference Manager RefWorks Zotero .ENW EndNote .BIB BibTeX JabRef Mendeley Buy options Actions Buying options Chapter USD   29.95 Price excludes VAT DOI: 10.1007/978-3-030-51280-4_7 Instant PDF download Readable on all devices Own it forever Exclusive offer for individuals only Buy Chapter eBook USD 84.99 Price excludes VAT ISBN: 978-3-030-51280-4 Instant PDF download Readable on all devices Own it forever Exclusive offer for individuals only Buy eBook Softcover Book USD 109.99 Price excludes VAT ISBN: 978-3-030-51279-8 Dispatched in 3 to 5 business days Exclusive offer for individuals only Free shipping worldwide COVID-19 restrictions may apply, check to see if you are impacted. 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