Related papers: Interdependencies between Mining Costs, Mining Rew…
Mining blocks in a blockchain using the \textit{Proof-of-Work} consensus protocol involves significant risk, as network participants face continuous operational costs while earning infrequent capital gains upon successfully mining a block.…
Blockchain protocols come with a variety of security guarantees. For example, BFT-inspired protocols such as Algorand tend to be secure in the partially synchronous setting, while longest chain protocols like Bitcoin will normally require…
Bitcoin is a popular cryptocurrency that records alltransactions in a distributed append-only public ledger calledblockchain. The security of Bitcoin heavily relies on the incentive-compatible proof-of-work (PoW) based distributed consensus…
In this paper, we systematically explore the attack surface of the Blockchain technology, with an emphasis on public Blockchains. Towards this goal, we attribute attack viability in the attack surface to 1) the Blockchain cryptographic…
Selfish mining is a well known vulnerability in blockchains exploited by miners to steal block rewards. In this paper, we explore a new form of selfish mining attack that guarantees high rewards with low cost. We show the feasibility of…
Although the blockchain-based applications are considered to be less vulnerable due to the nature of the distributed ledger, they did not become the silver bullet with respect to securing the information against different security risks. In…
Blockchain protocols incentivize participation through monetary rewards, assuming rational actors behave honestly to maximize their gains. However, attackers may attempt to harm others even at personal cost. These denial of profit attacks…
We model and analyze blockchain miners who seek to maximize the compound return of their mining businesses. The analysis of the optimal strategies finds a new equilibrium point among the miners and the mining pools, which predicts the…
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…
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…
Forks in the Bitcoin network result from the natural competition in the blockchain's Proof-of-Work consensus protocol. Their frequency is a critical indicator for the efficiency of a distributed ledger as they can contribute to resource…
This study provides a practical introduction to high-frequency trading in blockchain-based currency markets. These types of markets have some specific characteristics that differentiate them from the stock markets, such as a large number of…
A new variation of blockchain proof of work algorithm is proposed to incentivize the timely execution of image processing algorithms. A sample image processing algorithm is proposed to determine interesting images using analysis of the…
We develop several innovations to bring the best practices of traditional investment funds to the blockchain landscape. Specifically, we illustrate how: 1) fund prices can be updated regularly like mutual funds; 2) performance fees can be…
Blockchain-based cryptocurrencies prioritize transactions based on their fees, creating a unique kind of fee market. Empirically, this market has failed to yield stable equilibria with predictable prices for desired levels of service. We…
Transaction fees represent a major incentive in many blockchain systems as a way to incentivize processing transactions. Unfortunately, they also introduce an enormous amount of incentive asymmetry compared to alternatives like fixed block…
This paper extends the blockchain sustainability framework of Budish (2018) to consider proof of stake (in addition to proof of work) consensus mechanisms and permissioned (where the number of nodes are fixed) networks. It is demonstrated…
The security of most existing cryptocurrencies is based on a concept called Proof-of-Work, in which users must solve a computationally hard cryptopuzzle to authorize transactions (`one unit of computation, one vote'). This leads to enormous…
A decade long thrive of cryptocurrency has shown its potential as a source of alternative-finance and the security and the robustness of the underpinning blockchain technology. However, most cryptocurrencies fail to show inimitability and…
We argue that the current POW based consensus algorithm of the Bitcoin network suffers from a fundamental economic discrepancy between the real world transaction (txn) costs incurred by miners and the wealth that is being transacted. Put…