Related papers: Blockchain Price vs. Quantity Controls
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…
In the Bitcoin system, transaction fees serve as an incentive for blockchain confirmations. In general, a transaction with a higher fee is likely to be included in the next block mined, whereas a transaction with a smaller fee or no fee may…
Increasing popularity of trading digital assets can lead to significant delays in Blockchain networks when processing transactions. When transaction fees become miners' primary revenue, an imbalance in reward may lead to miners adopting…
Blockchain and blockchain-inspired decentralized applications are on the rise thanks to their unique characteristics such as their decentralized nature, anonymity, and tamper-proof nature; however, blockchain transactions tend to experience…
Payment channels are the most prominent solution to the blockchain scalability problem. We introduce the problem of network design with fees for payment channels from the perspective of a Payment Service Provider (PSP). Given a set of…
For preserving privacy, blockchains can be equipped with dedicated mechanisms to anonymize participants. However, these mechanism often take only the abstraction layer of blockchains into account whereas observations of the underlying…
I study a repeated auction in which payments are made with a blockchain token created and initially owned by the auction designer. Unlike the ``virtual money'' previously examined in mechanism design, such tokens can be saved and traded…
In this paper, we present a pricing mechanism that aligns incentives of agents who exchange resources on a decentralized ledger with the goal of maximizing transaction throughput. Subdividing a blockchain ledger into shards promises to…
The objective of this paper is the construction of new indicators that can be useful to operate in the cryptocurrency market. These indicators are based on public data obtained from the blockchain network, specifically from the nodes that…
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…
Payment channel networks are supposed to overcome technical scalability limitations of blockchain infrastructure by employing a special overlay network with fast payment confirmation and only sporadic settlement of netted transactions on…
Payment channel networks (PCNs) have emerged as a scalability solution for blockchains built on the concept of a payment channel: a setting that allows two nodes to safely transact between themselves in high frequencies based on…
This paper presents a comprehensive framework for transaction posting and pricing in Layer 2 (L2) blockchain systems, focusing on challenges stemming from fluctuating Layer 1 (L1) gas fees and the congestion issues within L2 networks.…
We study game-theoretic models for capturing participation in blockchain systems. Permissionless blockchains can be naturally viewed as games, where a set of potentially interested users is faced with the dilemma of whether to engage with…
Payment channel is a protocol which allows cryptocurrency users to route multiple transactions through network without committing them to the main blockchain network (mainnet). This ability makes them the most prominent solution to…
With rapid development of blockchain technology as well as integration of various application areas, performance evaluation, performance optimization, and dynamic decision in blockchain systems are playing an increasingly important role in…
In this paper, we construct a decentralized clearing mechanism which endogenously and automatically provides a claims resolution procedure. This mechanism can be used to clear a network of obligations through blockchain. In particular, we…
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…
We study long-term equilibria that arise in the token monetary policy, or tokenomics, design of proof-of-stake (PoS) blockchain systems that engage utility maximizing users and validators. Validators are system maintainers who get rewarded…
Payment channels allow transactions between participants of the blockchain to be executed securely off-chain, and thus provide a promising solution for the scalability problem of popular blockchains. We study the online network design…