Uncle Maker: (Time)Stamping Out The Competition in Ethereum

We present and analyze an attack on Ethereum 1's consensus mechanism, which allows miners to obtain higher mining rewards compared to their honest peers. This attack is novel in that it relies on manipulating block timestamps and the difficulty-adjustment algorithm (DAA) to give the miner an advantage whenever block races ensue. We call our attack Uncle Maker, as it induces a higher rate of uncle blocks. We describe several variants of the attack. Among these, one that is risk-free for miners. Our attack differs from past attacks such as Selfish Mining [30], that have been shown to be profitable but were never observed in practice: We analyze data from Ethereum's blockchain and show that some of Ethereum's miners have been actively running a variant of this attack for several years without being detected, making this the first evidence of miner manipulation of a major consensus mechanism. We present our evidence, as well as estimates of the profits gained by attackers, at the expense of honest miners. Since several blockchains are still running Ethereum 1's protocol, we suggest concrete fixes and implement them as a patch for geth.