The evolution of mining pools and miners’ behaviors in the Bitcoin blockchain

Natkamon Tovanich (), Nicolas Soulié, Nicolas Heulot () and Petra Isenberg ()
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Natkamon Tovanich: IRT SystemX, CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - IP Paris - Institut Polytechnique de Paris - CNRS - Centre National de la Recherche Scientifique
Nicolas Heulot: IRT SystemX
Petra Isenberg: AVIZ - Analysis and Visualization - LISN - Laboratoire Interdisciplinaire des Sciences du Numérique - Inria - Institut National de Recherche en Informatique et en Automatique - CentraleSupélec - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique - IaH - Interaction avec l'Humain - LISN - Laboratoire Interdisciplinaire des Sciences du Numérique - Inria - Institut National de Recherche en Informatique et en Automatique - CentraleSupélec - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique - Centre Inria de l'Université Paris-Saclay - Centre Inria de Saclay - Inria - Institut National de Recherche en Informatique et en Automatique

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Abstract: We analyzed 23 mining pools and explore the mobility of miners throughout Bitcoin's history. Mining pools have emerged as major players to ensure that the Bitcoin system stays secure, valid, and stable. Many questions remain open regarding how mining pools have evolved throughout Bitcoin's history and when and why miners join or leave the pools. We investigated the reward payout flow of mining pools and characterized them based on payout irregularity and structural complexity. Based on our proposed algorithm, we identified miners and studied their mobility in the pools over time. Our analysis shows that Bitcoin mining is an industry that is sensitive to external events (e.g., market price and government policy). Over time, competition between pools involving reward schemes and pool fees motivated miners to migrate between pools (i.e., pool hopping and cross pooling). These factors converged toward optimal scheme and values, which made mining activities more stable.

Keywords: Bitcoin; Bitcoin mining; Mining pools; Pool hopping; Visual analytics (search for similar items in EconPapers)
Date: 2022-09-01
New Economics Papers: this item is included in nep-pay
Note: View the original document on HAL open archive server: https://hal.science/hal-03610424v1
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Citations: View citations in EconPapers (4)

Published in IEEE Transactions on Network and Service Management, 2022, 19 (3), pp.3633-3644. ⟨10.1109/TNSM.2022.3159004⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03610424

DOI: 10.1109/TNSM.2022.3159004

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