Bitcoin: A Natural Oligopoly

【Author】 Arnosti, Nick; Weinberg, S. Matthew

【Source】MANAGEMENT SCIENCE

【影响因子】6.172

【Abstract】We argue that the concentrated production and ownership of Bitcoin mining hardware arise naturally from the economic incentives of Bitcoin mining. We model Bit coin mining as a two-stage competition; miners compete in prices to sell hardware while competing in quantities for mining rewards. We characterize equilibria in our model and show that small asymmetries in operational costs result in highly concentrated ownership of mining equipment. We further show that production of mining equipment will be dominated by the miner with the most efficient hardware, who will sell hardware to competitors while possibly also using it to mine.

【Keywords】economics; game theory and bargaining theory; Bitcoin; proof of work; cryptocurrency

【发表时间】

【收录时间】2022-01-29

【文献类型】期刊

【主题类别】

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