Related papers: Mean Field Game Approach to Bitcoin Mining
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…
In the area of blockchain, numerous methods have been proposed for suppressing intentional forks by attackers more effectively than the random rule. However, all of them, except for the random rule, require major updates, rely on a trusted…
We present the CheckMate tool for automated verification of game-theoretic security properties, with application to blockchain protocols. CheckMate applies automated reasoning techniques to determine whether a game-theoretic protocol model…
Convergence of the policy iteration method for discrete and continuous optimal control problems holds under general assumptions. Moreover, in some circumstances, it is also possible to show a quadratic rate of convergence for the algorithm.…
We formulate a mean field game where each player stops a privately observed Brownian motion with absorption. Players are ranked according to their level of stopping and rewarded as a function of their relative rank. There is a unique mean…
Blockchain systems run consensus rules as code to agree on the state of the distributed ledger and secure the network. Changing these rules can be risky and challenging. In addition, it can often be controversial and take much effort to…
We propose a mean field game (MFG) framework to model the evolution of renewable energy production in competitive electricity markets. Producers interact through the spot price while optimising their profits under production, installation,…
Blockchains lie at the heart of Bitcoin and other cryptocurrencies that have shown great promise to revolutionize finance and commerce. Although they are gaining increasing popularity, they face technical challenges when it comes to scaling…
Bitcoin and Ethereum, whose miners arguably collectively comprise the most powerful computational resource in the history of mankind, offer no more power for processing and verifying transactions than a typical smart phone. The system…
In this paper we explore several contexts where an adversary has an upper hand over the defender by using special hardware in an attack. These include password processing, hard-drive protection, cryptocurrency mining, resource sharing, code…
The Nakamoto consensus protocol underlying the Bitcoin blockchain uses proof of work as a voting mechanism. Honest miners who contribute hashing power towards securing the chain try to extend the longest chain they are aware of. Despite its…
With the development of decentralized consensus protocols, permissionless blockchains have been envisioned as a promising enabler for the general-purpose transaction-driven, autonomous systems. However, most of the prevalent blockchain…
This paper presents an asset pricing model in an incomplete market involving a large number of heterogeneous agents based on the mean field game theory. In the model, we incorporate habit formation in consumption preferences, which has been…
In most popular public accessible cryptocurrency systems, the mining pool plays a key role because mining cryptocurrency with the mining pool turns the non-profitable situation into profitable for individual miners. In many recent novel…
Optimization methods are used to determine equilibria of investment in cryptocurrencies. The basic assumptions involve existence of a core group (the "wealthy") that fears the loss of substantial assets through government seizure.…
Given a large number of homogeneous players that are distributed across three possible states, we consider the problem in which these players have to control their transition rates, while minimizing a cost. The optimal transition rates are…
We consider a project (model) owner that would like to train a model by utilizing the local private data and compute power of interested data owners, i.e., trainers. Our goal is to design a data marketplace for such decentralized…
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…
Cryptocurrencies that are based on Proof-of-Work (PoW) often rely on special purpose hardware to perform so-called mining operations that secure the system, with miners receiving freshly minted tokens as a reward for their work. A notable…
Optimistic responsiveness -- the ability of a consensus protocol to operate at the speed of the network -- is widely used in consensus protocol design to optimize latency and throughput. However, blockchain applications incentivize…