Better Incentives for Proof-of-Work

TL;DR

This paper introduces a new proof-of-work incentive scheme for blockchains that ensures miners act in a way that benefits the system, using a DAG structure to improve throughput and speed, even when miners act selfishly.

Contribution

It presents a novel incentive mechanism that aligns miners' selfish interests with the system's health without requiring prescriptive compliance.

Findings

Ensures following the protocol is optimal for miners under the new scheme.

Uses a DAG structure to enhance throughput and speed.

System remains functional even if miners act selfishly.

Abstract

This work proposes a novel proof-of-work blockchain incentive scheme such that, barring exogenous motivations, following the protocol is guaranteed to be the optimal strategy for miners. Our blockchain takes the form of a directed acyclic graph, resulting in improvements with respect to throughput and speed. More importantly, for our blockchain to function, it is not expected that the miners conform to some presupposed protocol in the interest of the system's operability. Instead, our system works if miners act selfishly, trying to get the maximum possible rewards, with no consideration for the overall health of the blockchain.