Multi-player dynamic game model for Bitcoin transaction bidding prediction

Guanghui Yan, Shan Wang, Shikui Li and Binwei Lu

The North American Journal of Economics and Finance, 2022, vol. 60, issue C

Abstract: With the rapid rise of cryptocurrencies, it has become an urgent problem to realize the flat use of digital currency, with making it really put into use, and giving full play to its utility in the current economic market. This paper innovatively takes the maximization of user benefit as the key point to predict transaction bidding price combining dynamic game theory. The bidding price of user transaction not only refers to historical transactions, but also considers the impact on future subsequences, and the result describes the interaction between transactions in detail. Also this paper proposes a method to express user satisfaction and establishes a user benefit model accordingly, so as to ensure the transaction is packaged successfully to the greatest extent within the acceptable range of transaction pricing. Finally this paper compares the proposed model with conventional machine learning prediction algorithms, finding that when user does not participate in the trading for the first time, the prediction effect of this proposal is better than that of machine learning over small data sets, moreover superior to machine learning methods in prediction accuracy and sensitivity, with a lower time complexity.

Keywords: Bitcoin; Prediction algorithm; Transaction fee; Multi-player dynamic game (search for similar items in EconPapers)
JEL-codes: C6 C7 C8 C9 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:60:y:2022:i:c:s1062940821002230

DOI: 10.1016/j.najef.2021.101631

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