Socially Optimal Mining Pools
| Autor: | Rafael Pass, Abhi Shelat, Ben Fisch |
|---|---|
| Rok vydání: | 2017 |
| Předmět: |
Operations research
business.industry 05 social sciences Pooling 02 engineering and technology Variance (accounting) computer.software_genre Crowdsourcing Unit (housing) Work (electrical) 0502 economics and business 0202 electrical engineering electronic engineering information engineering Economics Common value auction 020201 artificial intelligence & image processing Data mining Set (psychology) business computer Expected utility hypothesis 050205 econometrics |
| Zdroj: | Web and Internet Economics ISBN: 9783319719238 WINE |
| Popis: | Mining for Bitcoins is a high-risk high-reward activity. Miners, seeking to reduce their variance and earn steadier rewards, collaborate in so-called pooling strategies where they jointly mine for Bitcoins. Whenever some pool participant is successful, the earned rewards are appropriately split among all pool participants. Currently a dozen of different pooling strategies are in use for Bitcoin mining. We here propose a formal model of utility and social optimality for Bitcoin mining (and analogous mining systems) based on the theory of discounted expected utility, and next study pooling strategies that maximize the utility of participating miners in this model. We focus on pools that achieve a steady-state utility, where the utility per unit of work of all participating miners converges to a common value. Our main result shows that one of the pooling strategies actually employed in practice—the so-called geometric pay pool—achieves the optimal steady-state utility for miners when its parameters are set appropriately. Our results apply not only to Bitcoin mining pools, but any other form of pooled mining or crowdsourcing computations where the participants engage in repeated random trials towards a common goal, and where “partial” solutions can be efficiently verified. |
| Databáze: | OpenAIRE |
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