【Author】
Xue, Gang; Xu, Jia; Wu, Hanwen; Lu, Weifeng; Xu, Lijie
【Source】INFORMATION SYSTEMS FRONTIERS
【Abstract】Bitcoin is one of the most popular cryptocurrency in the world. Miners in the Bitcoin network reduce their risks through participating in mining pool. Existing mining pool systems do not consider the cost and strategy of miners. In this paper, we study two mining models: public cost model and private cost model. For the public cost model, we design an incentive mechanism, calledMininggame, using aStackelberggame. We show thatMininggame is individually rational, profitable, and has the uniqueStackelberg Equilibrium. For the private cost model, we formulate theBudget Feasible Reward Optimization(BFRO) problem to maximize the reward function under the budget constraint, and design a budget feasible reverse auction to solve theBFROproblem, which is computationally efficient, individually rational, truthful, budget feasible, and constant approximate. Through extensive simulations, we evaluate the performance and validate the theoretical properties of our incentive mechanisms.
【Keywords】Bitcoin; Mining pool; Incentive mechanism; Nash equilibrium; Auction
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