Related papers: Bitcoin Mining Decentralization via Cost Analysis
Bitcoin is a "crypto currency", a decentralized electronic payment scheme based on cryptography which has recently gained excessive popularity. Scientific research on bitcoin is less abundant. A paper at Financial Cryptography 2012…
Although Bitcoin was intended to be a decentralized digital currency, in practice, mining power is quite concentrated. This fact is a persistent source of concern for the Bitcoin community. We provide an explanation using a simple model to…
Proof of work cryptocurrencies began with the promise of a more egalitarian future with a decentralized monetary system with no powerful entities in charge. While this vision is far from realized, these cryptocurrencies are still touted to…
Does the proof-of-work protocol serve its intended purpose of supporting decentralized cryptocurrency mining? To address this question, we develop a game-theoretical model where miners first invest in hardware to improve the efficiency of…
The mining of bitcoin is modeled using system dynamics, showing that the past evolution of the network hash rate can be explained to a large extent by an efficient market hypothesis applied to the mining of blocks. The possibility of a…
Since its advent in 2009, Bitcoin, a cryptography-enabled peer-to-peer digital payment system, has been gaining increasing attention from both academia and industry. An effort designed to overcome a cluster of bottlenecks inherent in…
What happens to mining when the Bitcoin price changes, when there are mining supply shocks, the price of energy changes, or hardware technology evolves? We give precise answers based on the technical forces and incentives in the system. We…
Bitcoin has witnessed a prevailing transition that employing transaction fees paid by users rather than subsidy assigned by the system as the main incentive for mining.
Bitcoin-NG is among the first blockchain protocols to approach the \emph{near-optimal} throughput by decoupling blockchain operation into two planes: leader election and transaction serialization. Its decoupling idea has inspired a new…
Bitcoin uses blockchain technology and proof-of-work (PoW) mechanism where nodes spend computing resources and earn rewards in return for spending these resources. This incentive system has caused power to be significantly biased towards a…
Bitcoin is a representative decentralized currency system. For the security of Bitcoin, fairness in the distribution of mining rewards plays a crucial role in preventing the concentration of computational power in a few miners. Here,…
Explaining changes in bitcoin's price and predicting its future have been the foci of many research studies. In contrast, far less attention has been paid to the relationship between bitcoin's mining costs and its price. One popular notion…
We propose DIPS Difficulty-based Incentives for Problem Solving), a simple modification of the Bitcoin proof-of-work algorithm that rewards blockchain miners for solving optimization problems of scientific interest. The result is a…
A blockchain faces two fundamental challenges. It must motivate users to maintain the system while preventing a minority of these users from colluding and gaining disproportionate control. Many popular public blockchains use monetary…
Since Bitcoin's inception in 2008, it has became attractive investments for both trading and mining. To mine Bitcoins, a miner has to invest in computing power and pay for electricity to solve cryptographic puzzles for rewards, if it…
The Bitcoin cryptocurrency records its transactions in a public log called the blockchain. Its security rests critically on the distributed protocol that maintains the blockchain, run by participants called miners. Conventional wisdom…
Mining processes of Bitcoin and similar cryptocurrencies are currently incentivized with voluntary transaction fees and fixed block rewards which will halve gradually to zero. In the setting where optional and arbitrary transaction fee…
Bitcoin is a "crypto currency", a decentralized electronic payment scheme based on cryptography. Bitcoin economy grows at an incredibly fast rate and is now worth some 10 billions of dollars. Bitcoin mining is an activity which consists of…
Mining for Bitcoins is a high-risk high-reward activity. Miners, seeking to reduce their variance and earn steadier rewards, collaborate in pooling strategies where they jointly mine for Bitcoins. Whenever some pool participant is…
This work proposes a novel proof-of-work blockchain incentive scheme such that, barring exogenous motivations, following the protocol is guaranteed to be the optimal strategy for miners. Our blockchain takes the form of a directed acyclic…