Game-theoric approach to decision-making problem for blockchain mining

TL;DR

This paper models blockchain mining decision-making as a noncooperative game, revealing how rewards and the number of miners influence equilibrium behaviors and participation decisions.

Contribution

It introduces a game-theoretic framework for blockchain mining decisions, analyzing equilibrium phenomena and the impact of rewards and miner count.

Findings

Hysteresis phenomenon in Nash equilibria depending on reward

Jump phenomena in miner decisions with slight reward changes

Participation threshold decreases as number of miners increases

Abstract

It is an important decision-making problem for a miner in the blockchain networks if he/she participates in the mining so that he/she earns a reward by creating a new block earlier than other miners. We formulate this decision-making problem as a noncooperative game, because the probability of creating a block depends not only on one's own available computational resources, but also those of other miners. Through theoretical and numerical analyses, we show a hysteresis phenomenon of Nash equilibria depending on the reward and a jump phenomenon of miner decisions by a slight change in reward. We also show that the reward for which miners decide not to participate in the mining becomes smaller as the number of miners increases.