Dynamic Transaction Storage Strategies for a Sustainable Blockchain

TL;DR

This paper introduces Dynamic Transaction Storage strategies to enhance the sustainability of blockchain networks like Bitcoin as transaction fees become the primary mining reward, preventing strategic deviations and maintaining security.

Contribution

It proposes novel DTS strategies that reduce incentive volatility and ensure blockchain security under a transaction fee-based reward system.

Findings

DTS strategies effectively stabilize block incentives.

Simulation shows prevention of strategic deviations.

Blockchain sustainability is achievable with DTS.

Abstract

As the core technology behind Bitcoin, Blockchain's decentralized, tamper-proof, and traceable features make it the preferred platform for organizational innovation. In current Bitcoin, block reward is halved every four years, and transaction fees are expected to become the majority of miner revenues around 2140. When transaction fee dominates mining rewards, strategic deviations such as Selfish Mining, Undercutting, and Mining Gap could threaten the integrity and security of the Blockchain. This paper proposes a set of Dynamic Transaction Storage (DTS) strategies for maintaining a sustainable Blockchain under the transaction-fee regime. We demonstrate that block incentive volatility can be reduced through systematic simulation by applying DTS strategies and avoiding strategic deviations. With DTS, public Blockchains such as Bitcoin become sustainable when the mining reward is solely based on the transaction fee.