• Corpus ID: 41811876

The Bitcoin Mining Game: On the Optimality of Honesty in Proof-of-work Consensus Mechanism

  title={The Bitcoin Mining Game: On the Optimality of Honesty in Proof-of-work Consensus Mechanism},
  author={Juan Beccuti and Christian Jaag},
We consider a game in which Bitcoin miners compete for a reward of each solved puzzle in a sequence of them. We model it as a sequential game with imperfect information, in which miners have to choose whether or not to report their success. We show that the game has a multiplicity of equilibria and we analyze the parameter constellations for each of them. In particular, the minimum requirement to find it optimal not to report is decreasing with the number of miners who are not reporting, and… 

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Economic mechanism design in bitcoin: Mining, block formation and transaction fees', Swiss Economics Working Paper
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