TY - JOUR

T1 - On reward sharing in blockchain mining pools

AU - Can, Burak

AU - Hougaard, Jens Leth

AU - Pourpouneh, Mohsen

PY - 2022

Y1 - 2022

N2 - 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.

AB - 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.

U2 - 10.1016/j.geb.2022.10.002

DO - 10.1016/j.geb.2022.10.002

M3 - Journal article

VL - 136

SP - 274

EP - 298

JO - Games and Economic Behavior

JF - Games and Economic Behavior

SN - 0899-8256

ER -