Related papers: HaPPY-Mine: Designing a Mining Reward Function
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…
Proof-of-Work (PoW) systems face critical challenges, including excessive energy consumption and the centralization of mining power among entities with expensive hardware. Static mining pools exacerbate these issues by reducing competition…
In blockchains such as Bitcoin and Ethereum, users compete in a transaction fee auction to get their transactions confirmed in the next block. A line of recent works set forth the desiderata for a "dream" transaction fee mechanism (TFM),…
Does the proof-of-work protocol serve its intended purpose of supporting decentralized cryptocurrency mining? To address this question, we develop a game-theoretical model where miners first invest in hardware to improve the efficiency of…
It has been known for some time that the Nakamoto consensus as implemented in the Bitcoin protocol is not totally aligned with the individual interests of the participants. More precisely, it has been shown that block withholding mining…
In order to have transactions executed and recorded on blockchains such as the Ethereum Mainnet, fees expressed in crypto-currency units of the blockchain must be paid. One can buy crypto-currency called Ether of the Ethereum blockchain…
We model the ultimate price paid by users of a decentralized ledger as resulting from a two-stage game where Miners (/Proposers/etc.) first purchase blockspace via a Tullock contest, and then price that space to users. When analyzing our…
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 studies to what extent the cost of operating a proof-of-work blockchain is intrinsically linked to the cost of preventing attacks, and to what extent the underlying digital ledger security budgets are correlated with the…
Bitcoin's (BTC) Difficulty Adjustment Algorithm (DAA) has been a source of vulnerability for incentive attacks such as selfish mining, block withholding and coin hopping strategies. In this paper, first, we rigorously study the short-term…
Distributed peer-to-peer (P2P) networking delivers the new blocks and transactions and is critical for the cryptocurrency blockchain system operations. Having poor P2P connectivity reduces the financial rewards from the mining consensus…
Proof-of-Work mining is intended to provide blockchains with robustness against double-spend attacks. However, an economic analysis that follows from Budish (2018), which considers free entry conditions together with the ability to rent…
PinFi is a class of novel protocols for decentralized pricing of dissipative assets, whose value naturally declines over time. Central to the protocol's functionality and its market efficiency is the role of liquidity providers (LPs). This…
We describe a mechanism to create fair and explainable incentives for software developers to reward contributions to security of a product. We use cooperative game theory to model the actions of the developer team inside a risk management…
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…
Proof-of-stake (PoS) is a promising approach for designing efficient blockchains, where block proposers are randomly chosen with probability proportional to their stake. A primary concern with PoS systems is the "rich getting richer"…
In the Bitcoin system, participants are rewarded for solving cryptographic puzzles. In order to receive more consistent rewards over time, some participants organize mining pools and split the rewards from the pool in proportion to each…
This paper introduces a game-theoretic model tailored for reward distribution on crowd-sourced computing platforms. It explores a repeated game framework where miners, as computation providers, decide their computation power contribution in…
Blockchains offer a decentralized and secure execution environment strong enough to host cryptocurrencies, but the state-replication model makes on-chain computation expensive. To avoid heavy on-chain workloads, systems like Truebit and…
Bitcoin is a "crypto currency", a decentralized electronic payment scheme based on cryptography which has recently gained excessive popularity. Scientific research on bitcoin is less abundant. A paper at Financial Cryptography 2012…