Resource Burning for Permissionless Systems

TL;DR

This paper surveys resource burning in permissionless systems like proof-of-work, discusses its fundamental costs, and explores ways to reduce these costs while highlighting open problems for future research.

Contribution

It provides a comprehensive survey of resource burning techniques, analyzes their fundamental costs, and proposes open problems to guide future theoretical research.

Findings

Resource burning shares similarities with money burning and costly signaling.

Research can significantly lower asymptotic costs in various settings.

Open problems are identified for the distributed computing community.

Abstract

Proof-of-work puzzles and CAPTCHAS consume enormous amounts of energy and time. These techniques are examples of resource burning: verifiable consumption of resources solely to convey information. Can these costs be eliminated? It seems unlikely since resource burning shares similarities with "money burning" and "costly signaling", which are foundational to game theory, biology, and economics. Can these costs be reduced? Yes, research shows we can significantly lower the asymptotic costs of resource burning in many different settings. In this paper, we survey the literature on resource burning; take positions based on predictions of how the tool is likely to evolve; and propose several open problems targeted at the theoretical distributed-computing research community.