Varul Srivastava supervised by Dr. Sujit P Gujar  received his  Master of Science –  Dual Degree in Computer Science and Engineering  (CSD). Here’s a summary of his research work on Security and Decentralization of Blockchains in presence of Rational Players:

In this thesis, we study the problem of Security and Decentralization in distributed systems when incentive driven players are present. The challenge of security is crucial in distributed systems to ensure agreement of the current state among different players distributed across the globe. Distributed systems are used for critical infrastructures such as communication, finance and banking, data warehousing and storage. Therefore, the presence of security vulnerabilities allows for an attacker to exploit such infrastructure and cause disruptions — which can indirectly lead to severe consequences. Similarly, decentralization is another critical requirement from democratized distributed systems such as Blockchains, to ensure that no single player or a small set of like-minded players hold disproportionate control over the system. Centralization of a democratized distributed system such as blockchains can cause challenges such as censorship, reversing transactions, double payment, unilateral changes in the protocol, etc. Therefore, the challenges of security and decentralization of distributed systems are of critical importance. Recent literature has tackled this problem against a set of completely disruptive player (called Byzantine player) and a set of honest (altruistic) players that follow the protocol honestly. However, a more realistic model of the system would involve a discussion on incentive-driven players, which will follow a profit-maximizing strategy. This is the behavior of real-world players involved in such distributed protocols. Decentralization in Proof-of-Work (PoW) based blockchain protocols (which is a type of distributed consensus protocol) is challenged by Rational players– who aim to reduce risk in rewards through the formation of mining pools — where a group of miners give their mining power to a single pool manager in exchange for more frequent payments. This causes centralization of such PoW blockchains. Among existing works that address the problem of security in the presence of rational players, we cover the gaps and show that these bounds can be improved. We also show that a higher level of security is achievable through a clever design of the protocol. On the decentralization front, existing work aims to reduce centralization in PoW blockchains through protocol design. However, we propose a change in the class of reward mechanisms used in PoW blockchains that eliminates any incentives of centralization through pool formation. Overall, this thesis studies and solves the problem of security and decentralization in distributed systems. We identify that accountability and penalty are crucial components in designing such a mechanism, and show that we can improve the adversarial tolerance bounds by designing a consensus/agreement protocol using these two properties, while also guaranteeing security. In decentralization of PoW blockchains, we categorize the Block Reward Mechanisms (BRMs) into two categories — Memoryless and Retentive BRMs. We show that most existing blockchains use Memoryless BRMs and it is impossible to achieve true decentralization using such BRMs. We then propose our own retentive BRM —decentBRMwhich achieves true decentralization. This proves through construction that true decentralization can be achieved using Retentive BRMs. Our work shows changes in reward/penalty schemes can achieve a higher level of security and decentralization in the presence of rational players. The goal of this thesis is to demonstrate the possibility of solving challenges in cryptographic protocols involving rational players through changes in reward/penalty schemes.

July 2025