On reward sharing in blockchain mining pools

Burak Can, Jens Leth Hougaard and Mohsen Pourpouneh

Games and Economic Behavior, 2022, vol. 136, issue C, 274-298

Abstract: This paper proposes a conceptual framework for the analysis of reward sharing schemes in mining pools, such as those associated with Bitcoin. The framework is centered around the reported shares in a pool instead of agents and introduces two new fairness criteria: absolute and relative redistribution. These criteria impose that the addition of a share to a round affects all previous shares of the round in the same way, either in absolute amount or in relative ratio. We characterize two large classes of reward sharing schemes corresponding to each of these fairness criteria in turn. We further show that the intersection of these classes brings about a generalization of the well-known proportional scheme, which in turn leads to a new characterization of the proportional scheme itself.

Keywords: Blockchain; Bitcoin; Fairness; Mining pools; Resource allocation; Mechanism design (search for similar items in EconPapers)
JEL-codes: D31 D63 G20 L86 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: On Reward Sharing in Blockchain Mining Pools (2021)
Working Paper: On Reward Sharing in Blockchain Mining Pools (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:136:y:2022:i:c:p:274-298

DOI: 10.1016/j.geb.2022.10.002

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