Impact of Temporary Fork on the Evolution of Mining Pools in Blockchain Networks: An Evolutionary Game Analysis

TL;DR

This paper models how temporary forks in proof-of-work blockchains influence the evolution of mining pools, revealing stable power distributions through an evolutionary game approach supported by simulations and real data.

Contribution

It introduces a novel mathematical and evolutionary game model focusing on miners' computing power competition and its effect on temporary forks in blockchain networks.

Findings

Derived a closed-form formula for temporary fork probability.

Identified stable equilibrium states of mining power distribution.

Validated models with simulations and real blockchain data.

Abstract

Temporary fork is a fundamental phenomenon in many blockchains with proof of work, and the analysis of temporary fork has recently drawn great attention. Different from existing efforts that focus on the blockchain system factors such as block size, network propagation delay or block generation speed, in this paper we explore a new key dimension of computing power from the miners' perspective. Specifically, we first propose a detailed mathematical model to characterize the impact of computing power competition of the mining pools on the temporary fork. We also derive closed-form formula of the probability of temporary fork and the expected mining reward of a mining pool. To reveal the long-term trends on the computing power distributions over the competing mining pools, we then develop an evolutionary game framework based on the temporary fork modeling and accordingly characterize the set of stable evolution equilibriums. Both extensive numerical simulations and realistic blockchain data based evaluation provide evidence to support our theoretical models and discoveries.