Bitcoin transaction fees and the decentralization of Bitcoin mining pools

【Author】 Li, Zhicheng; Li, Jialong; Zhou, Ke

【Source】FINANCE RESEARCH LETTERS

【影响因子】9.848

【Abstract】In this paper, we propose a novel mechanism for decentralizing Bitcoin mining pools: the uncertain mining reward resulting from Bitcoin transaction fees. We present a simple model to demonstrate that risk-averse Bitcoin miners are more likely to allocate their computational power across multiple mining pools when transaction fees make up a large fraction of the mining reward. Our empirical study shows a negative relatinship between the proportion of transaction fees and the decentralization of Bitcoin mining pools. Our study suggests that an active Bitcoin trading market or a decreasing fixed reward from mining would lead Bitcoin mining pools to be more decentralized.

【Keywords】Bitcoin transaction fees; Mining pools; Decentralization; Hash rate allocation

【发表时间】2023 DEC

【收录时间】2023-10-25

【文献类型】实证数据

【主题类别】

区块链治理-市场治理-挖矿分析