Mapping out Sybil Resistance Mechanisms

One of the biggest risks for decentralized networks is Sybil attacks. In a Sybil attack, an attacker creates a large number of accounts to trick a network into thinking that several individual accounts are participating in the network, when in fact they are all controlled by the attacker. The attacker then leverages these accounts to exert influence on the network in variety of ways: manipulating the reputation system of an e-commerce shop, obtaining a disproportionate share of a network's resources, etc. 

To avoid Sybil attacks, centralized networks set rules and approval measures for accounts that want to participate in the network. Decentralized networks, however, are particularly prone to Sybil attacks due to their permissionless nature: any individual can participate in their networks. As a past example, attackers have performed versions of Sybil attacks on popular P2P networks like BitTorrent.

With direct monetary incentives introduced by cryptocurrencies, Sybil attacks have become more attractive for attackers. A Sybil attacker on a blockchain network can reject transactions for specific individuals on a network and, in certain situations execute double-spends. To lower the possibilities of Sybil attacks on Bitcoin, Satoshi Nakamoto implemented Proof-of-Work as a Sybil resistance mechanism. Proof-of-Work requires participants on a network to pay computational resources for the right to mine blocks and confirm transactions. This mechanism effectively limits the number of blocks a potential attacker can produce as they are required to contribute a proportional amount of computational resources to produce these blocks, therefore creating an economic barrier for gaining control of a network.

Following the introduction of Bitcoin, various networks have emerged introducing their own Sybil resistance mechanisms to protect their networks. The Block has mapped out some of the most popular Sybil resistance mechanisms employed by the top 50 cryptocurrencies by market capitalization.¹

Proof-of-Work

The Proof-of-Work (PoW) mechanism uses computational resources to secure a blockchain and create new blocks. Miners on PoW networks race to mine blocks on these networks — expending energy in the process. In contentious events, PoW helps determine the true state of a ledger by following the chain that has accumulated the most work (energy).

Proof-of-Stake

The Proof-of-Stake (PoS) mechanism uses a miner’s (validator) economic stake in a network to determine who can secure and validate transactions for a public blockchain. In a PoS system, a group of miners take turns voting for a block to be validated. The weight of a vote depends on the size of a miner’s stake in the network — the higher the stake, the more weight a miner has when voting. In contentious events, PoS helps determine the true state of a ledger by following the chain that has accumulated the most stake (coin backing).

Delegated-Proof-of-Stake

The Delegated-Proof-of-Stake (DPoS) mechanism is similar to the PoS mechanism with one caveat: there is a pre-determined limited set of miners (validators) allowed to propose and validate blocks onto a blockchain. Token holders on DPoS networks vote on which validators get to be a part of this pre-determined set of validators — allowing backup validators to replace former validators.

Other

Beyond the three most popular Sybil resistance mechanisms implemented by the 50 largest coins by market cap, various coins have implemented their own unique sets of Sybil resistance mechanisms. These range from Liquid Proof of Stake implemented by Tezos and hybrid model implemented by the likes of Decred.

¹ Top 50 market cap as of 1/11/19