Related papers: Bitcoin Mining Decentralization via Cost Analysis
Mining in proof-of-work blockchains has become an expensive affair requiring specialized hardware capable of executing several megahashes per second at huge electricity costs. Miners earn a reward each time they mine a block within the…
The Bitcoin network is burning a large amount of energy for mining. In this paper we estimate the lower bound for the global energy cost for a period of ten years from 2010, taking into account changing oil costs, improvements in hashing…
Miners play a key role in cryptocurrencies such as Bitcoin: they invest substantial computational resources in processing transactions and minting new currency units. It is well known that an attacker controlling more than half of the…
Background: During the last years, there has been a lot of discussion and estimations on the energy consumption of Bitcoin miners. However, most of the studies are focused on estimating energy consumption, not in exploring the factors that…
We propose a mean field game model to study the question of how centralization of reward and computational power occur in Bitcoin-like cryptocurrencies. Miners compete against each other for mining rewards by increasing their computational…
Mining blocks on a blockchain equipped with a proof of work consensus protocol is well-known to be resource-consuming. A miner bears the operational cost, mainly electricity consumption and IT gear, of mining, and is compensated by a…
Bitcoin uses blockchain technology to maintain transactions order and provides probabilistic guarantee to prevent double-spending, assuming that an attacker's computational power does not exceed %50 of the network power. In this paper, we…
Today's world is organized based on merit and value. A single global currency that's decentralized is needed for a global economy. Bitcoin is a partial solution to this need, however it suffers from scalability problems which prevent it…
In this paper we give an elementary analysis of economics of Bitcoin that combines the transaction demand by the consumers and the supply of hashrate by miners. We argue that the decreasing block reward will have no significant effect on…
Bitcoin, a decentralized cryptocurrency, has attracted a lot of attention from academia, financial service industry and enthusiasts. The trade-off between transaction confirmation throughput and centralization of hash power do not allow…
The Bitcoin Lightning Network (LN) is designed to improve the scalability of blockchain systems by using off-chain payment paths to settle transactions in a faster, cheaper, and more private manner. This work aims to empirically study LN's…
We develop a dynamic model of the Bitcoin market where users set fees themselves and miners decide whether to operate and whom to validate based on those fees. Our analysis reveals how, in equilibrium, users adjust their bids in response to…
Blockchain systems often employ proof-of-work consensus protocols to validate and add transactions into hashchains. These protocols stimulate competition among miners in solving cryptopuzzles (e.g. SHA-256 hash computation in Bitcoin) in…
In recent years, cryptocurrencies have attracted growing attention from both private investors and institutions. Among them, Bitcoin stands out for its impressive volatility and widespread influence. This paper explores the predictability…
Blockchain is a technology that provides a distributed ledger that stores previous records while maintaining consistency and security. Bitcoin is the first and largest decentralized electronic cryptographic system that uses blockchain…
Mining fairness in blockchain refers to equality between the computational resources invested in mining and the block rewards received. There exists a dilemma wherein increasing the transaction processing capacity of a blockchain…
Most current assessments use ex post proxies that miss uncertainty and fail to consistently capture the rapid change in bitcoin mining. We introduce a unified, ex ante statistical model that derives expected return, downside risk, and…
Bitcoin is a decentralized crypto-currency, and an accompanying protocol, created in 2008. Bitcoin nodes continuously generate and propagate blocks---collections of newly approved transactions that are added to Bitcoin's ledger. Block…
Bitcoin is the first implementation of what has become known as a 'public permissionless' blockchain. Guaranteeing security and protocol conformity through its elegant combination of cryptographic assurances and game theoretic economic…
The Bitcoin payment system involves two agent types: Users that transact with the currency and pay fees and miners in charge of authorizing transactions and securing the system in return for these fees. Two of Bitcoin's challenges are (i)…