Related papers: Bitcoin: A Natural Oligopoly
This paper introduces a structural game-theoretic model to value decentralized digital assets like Bitcoin. Instead of relying on speculative beliefs, it frames the asset's price within a Rational-Expectations Security-Utility Nash…
The value of proof-of-work cryptocurrencies critically depends on miners having incentives to follow the protocol. However, the Bitcoin mining protocol proposed by Nakamoto (2008) and implemented in practice is well known not to constitute…
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…
To participate in the distributed consensus of permissionless blockchains, prospective nodes -- or miners -- provide proof of designated, costly resources. However, in contrast to the intended decentralization, current data on blockchain…
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…
Transaction fee mechanism design is a new decentralized mechanism design problem where users bid for space on the blockchain. Several recent works showed that the transaction fee mechanism design fundamentally departs from classical…
Blockchain is rapidly emerging as an important class of network application, with a unique set of trust, security and transparency properties. In a blockchain system, participants record and update the `server-side' state of an application…
Many of today's crypto currencies use blockchains as decentralized ledgers and secure them with proof of work. In case of a fork of the chain, Bitcoin's rule for achieving consensus is selecting the longest chain and discarding the other…
Blockchain-based federated learning (BCFL) has recently gained tremendous attention because of its advantages such as decentralization and privacy protection of raw data. However, there has been few research focusing on the allocation of…
Bitcoin and other similar digital currencies on blockchains are not ideal means for payment, because their prices tend to go up in the long term (thus people are incentivized to hoard those currencies), and to fluctuate widely in the short…
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…
When network products and services become more valuable as their userbase grows (network effects), this tendency can become a major determinant of how they compete with each other in the market and how the market is structured. Network…
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…
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…
Bitcoin is a decentralised digital currency that serves as an alternative to existing transaction systems based on an external central authority for security. Although Bitcoin has many desirable properties, one of its fundamental…
Cryptocurrencies have recently been in the spotlight of public debate due to their embrace by the new US President, with crypto fans expecting a 'bull run'. The global cryptocurrency market capitalisation is more than \$3.50 trillion, with…
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…
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…
We present an analysis of the Proof-of-Work consensus algorithm, used on the Bitcoin blockchain, using a Mean Field Game framework. Using a master equation, we provide an equilibrium characterization of the total computational power devoted…
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…