Related papers: Selfish Mining under General Stochastic Rewards
Cryptocurrency miners have great latitude in deciding which transactions they accept, including their own, and the order in which they accept them. Ethereum miners in particular use this flexibility to collect MEV-Miner Extractable Value-by…
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…
Bitcoin mining is a wasteful and resource-intensive process. To add a block of transactions to the blockchain, miners spend a considerable amount of energy. The Bitcoin protocol, named 'proof of work' (PoW), resembles a lottery and the…
Bitcoin constructs temporal order internally rather than synchronizing to any external clock. Empirical evidence shows that its time evolution is non-continuous, probabilistic, and self-regulated. Block discovery follows a stochastic…
Miners play a key role in cryptocurrencies such as Bitcoin: they invest substantial computational resources in processing transactions and minting new currency units. It is well known that an attacker controlling more than half of the…
Bitcoin uses blockchain technology and proof-of-work (PoW) mechanism where nodes spend computing resources and earn rewards in return for spending these resources. This incentive system has caused power to be significantly biased towards 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…
An open distributed system can be secured by requiring participants to present proof of work and rewarding them for participation. The Bitcoin digital currency introduced this mechanism, which is adopted by almost all contemporary digital…
We are often faced with the non-trivial task of designing incentive mechanisms in the era of Web3. As history has shown, many Web3 services failed mostly due to the lack of a rigorous incentive mechanism design based on token economics.…
Proof-of-work computation used in cryptocurrencies has witnessed significant growth in the U.S. and many other regions around the world. One of the most significant bottlenecks for the scalable deployment of such computation is its energy…
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…
The emerging cryptocurrency market has lately received great attention for asset allocation due to its decentralization uniqueness. However, its volatility and brand new trading mode have made it challenging to devising an acceptable…
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…
Stubborn mining attack greatly downgrades Bitcoin throughput and also benefits malicious miners (attackers). This paper aims to quantify the impact of block receiving delay on stubborn mining attack severity in imperfect Bitcoin networks.…
The idea of security sharing goes back to Nakamoto's introduction of merge mining, a technique that enables Bitcoin miners to reuse their hash power to bootstrap and secure other Proof-of-Work (PoW) blockchains. However, with the rise of…
The energy sustainability of blockchains, whose consensus protocol rests on the Proof-of-Work, nourishes a heated debate. The underlying issue lies in a highly energy-consuming process, defined as mining, required to validate crypto-asset…
Since Bitcoin's inception in 2008, it has became attractive investments for both trading and mining. To mine Bitcoins, a miner has to invest in computing power and pay for electricity to solve cryptographic puzzles for rewards, if it…
For a mining strategy we define the notion of "profit lag" as the minimum time it takes to be profitable after that moment. We compute closed forms for the profit lag and the revenue ratio for the strategies "selfish mining" and…
We study to what extent the Bitcoin blockchain security permanently depends on the underlying distribution of cryptocurrency market outcomes. We use daily blockchain and Bitcoin data for 2014-2019 and employ the ARDL approach. We test three…
Motivated by cognitive radios, stochastic multi-player multi-armed bandits gained a lot of interest recently. In this class of problems, several players simultaneously pull arms and encounter a collision - with 0 reward - if some of them…