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Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
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TY - JOUR
T1 - Game-Theoretic Analysis of an Exclusively Transaction-Fee Reward Blockchain System
AU - Kruminis, Edvinas
AU - Navaie, Keivan
PY - 2022/1/31
Y1 - 2022/1/31
N2 - Miners in a blockchain system are typically rewarded in two ways - through a fixed block reward, and by the transaction fees that are voluntarily offered by its users. As the available space inside a block is limited, users must compete against each other by submitting higher fees to obtain this limited resource. In this paper, we model blockchain transaction inclusion as a time-sensitive dynamic game, where users base their fees depending on both what their competitors in the network are offering, and by their own urgency of having their transactions approved. We then investigate the effect that mempool congestion (the aggregate size of transactions waiting to be confirmed) and different block sizes have on the fees users would be willing to pay. Our analysis concludes that miners have no rational reason to artificially limit the block size, which is in direct contrast with previous research findings. Instead, we find that increasing the block size in relation to a growing mempool both lowers the individual fees that users have to pay, and increases the total in fees collected, which raises not only the utility of the miners, but also of the regular users of the blockchain system.
AB - Miners in a blockchain system are typically rewarded in two ways - through a fixed block reward, and by the transaction fees that are voluntarily offered by its users. As the available space inside a block is limited, users must compete against each other by submitting higher fees to obtain this limited resource. In this paper, we model blockchain transaction inclusion as a time-sensitive dynamic game, where users base their fees depending on both what their competitors in the network are offering, and by their own urgency of having their transactions approved. We then investigate the effect that mempool congestion (the aggregate size of transactions waiting to be confirmed) and different block sizes have on the fees users would be willing to pay. Our analysis concludes that miners have no rational reason to artificially limit the block size, which is in direct contrast with previous research findings. Instead, we find that increasing the block size in relation to a growing mempool both lowers the individual fees that users have to pay, and increases the total in fees collected, which raises not only the utility of the miners, but also of the regular users of the blockchain system.
U2 - 10.1109/access.2022.3140921
DO - 10.1109/access.2022.3140921
M3 - Journal article
VL - 10
SP - 5002
EP - 5011
JO - IEEE Access
JF - IEEE Access
SN - 2169-3536
ER -