Related papers: Redesigning Bitcoin's fee market
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 is firmly becoming a mainstream asset in our global society. Its highly volatile nature has traders and speculators flooding into the market to take advantage of its significant price swings in the hope of making money. This work…
Different versions of peer-to-peer electronic cash exist as data represented by separate blockchains. Payments between such systems cannot be sent directly from one party to another without going through a financial institution. Bitcoin…
How do supply and demand from informed traders drive market prices of bitcoin options? Deribit options tick-level data supports the limits-to-arbitrage hypothesis about the market maker's supply. The main demand-side effects are that…
Cryptocurrencies are distributed systems that allow exchanges of native tokens among participants, or the exchange of such tokens for fiat currencies in markets external to these public ledgers. The availability of their complete historical…
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…
One reason for the popularity of Bitcoin is due to its anonymity. Although several heuristics have been used to break the anonymity, new approaches are proposed to enhance its anonymity at the same time. One of them is the mixing service.…
Payment channel networks like Bitcoin's Lightning network are an auspicious approach for realizing high transaction throughput and almost-instant confirmations in blockchain networks. However, the ability to successfully make payments in…
This paper develops a model to evaluate the viability of blockchain markets as the sole venue for price formation. Blockchains clear at discrete intervals called block time, and transactions are executed sequentially according to priority…
We study the following problem that is motivated by Blockchains where ``miners'' are serially given the monopoly for assembling transactions into the next block. Our model has a single good that is sold repeatedly every day where new demand…
In recent years, prominent blockchain systems such as Bitcoin and Ethereum have experienced explosive growth in transaction volume, leading to frequent surges in demand for limited block space and causing transaction fees to fluctuate by…
Cryptocurrencies such as Bitcoin are realized using distributed systems and hence critically rely on the performance and security of the interconnecting network. The requirements on these networks and their usage, however can differ…
Most public blockchain protocols, including the popular Bitcoin and Ethereum blockchains, do not formally specify the order in which miners should select transactions from the pool of pending (or uncommitted) transactions for inclusion in…
This paper studies the optimal transaction fee mechanisms for blockchains, focusing on the distinction between price-based ($\mathcal{P}$) and quantity-based ($\mathcal{Q}$) controls. By analyzing factors such as demand uncertainty,…
We consider the execution of smart contracts on Bitcoin. There, every contract step corresponds to appending to the blockchain a new transaction that spends the output representing the old contract state, creating a new one for the updated…
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…
Mining pools, the main components of the Bitcoin network, dominate the computing resources and play essential roles in network security and performance aspects. Although many existing measurements of the Bitcoin network are available,…
Cryptocurrency networks such as Bitcoin have emerged as a distributed alternative to traditional centralized financial transaction networks. However, there are major challenges in scaling up the throughput of such networks. Lightning…
A hard-fork reconfiguration of the peer to peer Bitcoin network is described that substitutes tamper-evident logs and proof-of-stake consensus for proof-of-work consensus. The block creation rewards and transaction fees are reallocated to…
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…