Decentralized Incentive-Compatible and Sybil-Proof Transaction Advertisement

Oğuzhan Ersoy (), Zekeriya Erkin () and Reginald L. Lagendijk ()
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Oğuzhan Ersoy: Delft University of Technology
Zekeriya Erkin: Delft University of Technology
Reginald L. Lagendijk: Delft University of Technology

A chapter in Mathematical Research for Blockchain Economy, 2020, pp 151-165 from Springer

Abstract: Abstract In a blockchain network, transaction advertisement is the announcement of the new transactions to the participants (miners) who are responsible to validate them. Existing blockchain protocols lack an incentive-compatible advertisement process where a rational participant would gain from advertising a transaction. The deficiency can be solved by a Sybil-proof rewarding function which divides the transaction fee among the round leader and the nodes who advertise it. Up to now, there have been three rewarding function proposals, all of which require special constraints on the blockchain network model, e.g., tree-structured connections. In this work, we formulate the rewarding function and obtain the necessary conditions for Sybil-proofness and incentive-compatibility properties. To the best of our knowledge, we present the first rewarding function which is suitable for any blockchain network model. We introduce path length dependent rewarding for the nodes involved in the advertisement process, which helps us to overcome the impossibility results given in the previous works. Our rewarding function divides the transaction fee among the nodes who advertise it, the current round leader and the next round leader. In addition to these achievements, unlike previous proposals, our rewarding function provides resistance against the forking attacks where an adversary rejects a valid block and creates a fork to gain the transaction fees in the original block.

Keywords: Blockchain; Transaction advertisement; Incentive mechanism (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-030-37110-4_11

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DOI: 10.1007/978-3-030-37110-4_11

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