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This paper presents a formal analysis of the Lightning Network as a monetary system structurally diverging from Bitcoin's base-layer settlement model. We demonstrate that under increasing transaction demand, BTC transaction fees rise…
Traditional blockchain design gives miners or validators full control over transaction ordering, i.e., they can freely choose which transactions to include or exclude, as well as in which order. While not an issue initially, the emergence…
Bitcoin is a digital financial asset that is devoid of a central authority. This makes it distinct from traditional financial assets in a number of ways. For instance, the total number of tokens is limited and it has not explicit use value.…
In the dynamic landscape of the Web, we are witnessing the emergence of the Web3 paradigm, which dictates that platforms should rely on blockchain technology and cryptocurrencies to sustain themselves and their profitability.…
Bitcoin is the world's first decentralized digital currency. Its main technical innovation is the use of a blockchain and hash-based proof of work to synchronize transactions and prevent double-spending the currency. While the qualitative…
Bitcoin is the first and highest valued cryptocurrency that stores transactions in a publicly distributed ledger called the blockchain. Understanding the activity and behavior of Bitcoin actors is a crucial research topic as they are…
Using Wilf-Zeilberger algorithmic proof theory, we continue pioneering work of Meni Rosenfeld (followed up by interesting work by Cyril Grunspan and Ricardo Perez-Marco) and study the probability and duration of successful bitcoin attacks,…
One of the fundamental applications for a practically useful system of money is remuneration. Information pertaining to the amount of compensation awarded to different individuals is often considered sensitive, commanding a certain degree…
The coin-position entanglement generated by the evolution operator of a discrete--time quantum walk converges, in the long time limit, to a well defined value which depends on the initial state. We also discuss the asymptotic bi-partite…
We present a methodology for evidence based design of cryptoeconomic systems, and elucidate a real-world example of how this methodology was used in the design of a blockchain network. This work provides a rare insight into the application…
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…
The digital currency Bitcoin has had remarkable growth since it was first proposed in 2008. Its distributed nature allows currency transactions without a central authority by using cryptographic methods and a data structure called the…
Decentralized Ledger Technology, popularized by the Bitcoin network, aims to keep track of a ledger of valid transactions between agents of a virtual economy without a central institution for coordination. In order to keep track of a…
We ask the question whether entropy accumulates, in the sense that the operationally relevant total uncertainty about an $n$-partite system $A = (A_1, \ldots A_n)$ corresponds to the sum of the entropies of its parts $A_i$. The Asymptotic…
This research paper provides a comprehensive analysis of Bitcoin, delving into its evolution, adoption, and potential future implications. As the pioneering cryptocurrency, Bitcoin has sparked significant interest and debate in recent…
We propose a model suggesting that honest-but-rational consensus participants may play timing games, and strategically delay their block proposal to optimize MEV capture, while still ensuring the proposal's timely inclusion in the canonical…
Blockchains are significantly easing trade finance, with billions of dollars worth of assets being transacted daily. However, analyzing these networks remains challenging due to the sheer volume and complexity of the data. We introduce a…
Cryptocurrencies gain trust in users by publicly disclosing the full creation and transaction history. In return, the transaction history faithfully records the whole spectrum of cryptocurrency user behaviors. This article analyzes and…
We propose DIPS Difficulty-based Incentives for Problem Solving), a simple modification of the Bitcoin proof-of-work algorithm that rewards blockchain miners for solving optimization problems of scientific interest. The result is a…
We study decentralized cryptocurrency protocols in which the participants do not deplete physical scarce resources. Such protocols commonly rely on Proof of Stake, i.e., on mechanisms that extend voting power to the stakeholders of the…