Title: Stateless Puzzles for Real Time Online Fraud Preemption,
Abstract: The profitability of fraud in online systems such as app markets and social
networks marks the failure of existing defense mechanisms. In this paper, we
propose FraudSys, a real-time fraud preemption approach that imposes
Bitcoin-inspired computational puzzles on the devices that post online system
activities, such as reviews and likes. We introduce and leverage several novel
concepts that include (i) stateless, verifiable computational puzzles, that
impose minimal performance overhead, but enable the efficient verification of
their authenticity, (ii) a real-time, graph-based solution to assign fraud
scores to user activities, and (iii) mechanisms to dynamically adjust puzzle
difficulty levels based on fraud scores and the computational capabilities of
devices. FraudSys does not alter the experience of users in online systems, but
delays fraudulent actions and consumes significant computational resources of
the fraudsters. Using real datasets from Google Play and Facebook, we
demonstrate the feasibility of FraudSys by showing that the devices of honest
users are minimally impacted, while fraudster controlled devices receive daily
computational penalties of up to 3,079 hours. In addition, we show that with
FraudSys, fraud does not pay off, as a user equipped with mining hardware
(e.g., AntMiner S7) will earn less than half through fraud than from honest
Bitcoin mining.