On Reward Sharing in Blockchain Mining Pools

Burak Can, Jens Leth Hougaard and Mohsen Pourpouneh

No 9, Research Memorandum from Maastricht University, Graduate School of Business and Economics (GSBE)

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 results in two new fairness criteria, absolute and relative redistribution. These criteria impose that the addition of a share to the pool affects all previous shares in the same way, either in absolute amount or in relative ratio. We characterize two large classes of economically viable 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 also leads to a new characterization of the proportional scheme as a corollary.

JEL-codes: D31 D63 G20 L86 (search for similar items in EconPapers)
Date: 2021-05-27
New Economics Papers: this item is included in nep-gth
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https://cris.maastrichtuniversity.nl/ws/files/64723171/RM21009.pdf (application/pdf)

Related works:
Journal Article: On reward sharing in blockchain mining pools (2022)
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:unm:umagsb:2021009

DOI: 10.26481/umagsb.2021009

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