Incentive Compatibility of Pay Per Last N Shares in Bitcoin Mining Pools

Yevhen Zolotavkin, Julian Garcia, Carsten Rudolph

    Research output: Chapter in Book/Report/Conference proceedingConference PaperResearchpeer-review

    7 Citations (Scopus)

    Abstract

    Pay per last N shares (PPLNS) is a popular pool mining reward mechanism on a number of cryptocurrencies, including Bitcoin. In PPLNS pools, miners may stand to benefit by delaying reports of found shares. This attack may entail unfair or inefficient outcomes. We propose a simple but general game theoretical model of delays in PPLNS. We derive conditions for incentive compatible rewards, showing that the power of the most powerful miner determines whether incentives are compatible or not. An efficient algorithm to find Nash equilibria is put forward, and used to show how fairness and efficiency deteriorate with inside-pool inequality. In pools where all players have comparable computational power incentives to deviate from protocol are minor, but gains may be considerable in pools where miner’s resources are unequal. We explore how our findings can be applied to ameliorate delay attacks by fitting real-world parameters to our model.

    Original languageEnglish
    Title of host publicationDecision and Game Theory for Security - 8th International Conference, GameSec 2017, Proceedings
    Subtitle of host publication8th International Conference, GameSec 2017, Vienna, Austria, October 23–25, 2017, Proceedings
    EditorsStefan Rass, Bo An, Christopher Kiekintveld, Fei Fang, Stefan Schauer
    Place of PublicationCham, Switzerland
    PublisherSpringer
    Pages21-39
    Number of pages19
    Volume10575 LNCS
    ISBN (Electronic)9783319687117
    ISBN (Print)9783319687100
    DOIs
    Publication statusPublished - 2017
    EventInternational Conference on Decision and Game Theory for Security (GameSec) 2017 - Vienna, Austria
    Duration: 23 Oct 201725 Oct 2017
    Conference number: 8th
    https://link.springer.com/book/10.1007/978-3-319-68711-7

    Publication series

    NameLecture Notes in Computer Science
    PublisherSpringer
    Volume10575
    ISSN (Print)0302-9743
    ISSN (Electronic)1611-3349

    Conference

    ConferenceInternational Conference on Decision and Game Theory for Security (GameSec) 2017
    Abbreviated titleGameSec 2017
    CountryAustria
    CityVienna
    Period23/10/1725/10/17
    Internet address

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