On Reward Sharing in Blockchain Mining Pools

Arbeitspapier

This paper proposes a conceptual framework for the analysis of reward sharing schemes in mining pools, such as those associated with Bitcoin. The framework is centered around the reported shares in a pool instead of agents and results in two new fairness criteria, absolute and relative redistribution. These criteria impose that the addition of a share to the pool affects all previous shares in the same way, either in absolute amount or in relative ratio. We characterize two large classes of economically viable reward sharing schemes corresponding to each of these fairness criteria in turn. We further show that the intersection of these classes brings about a generalization of the the well-known proportional scheme, which also leads to a new characterization of the proportional scheme as a corollary.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IFRO Working Paper ; No. 2020/09

Classification and Topics

• Classification: Wirtschaft ; Equity, Justice, Inequality, and Other Normative Criteria and Measurement ; Financial Institutions and Services: General ; Information and Internet Services; Computer Software ; Personal Income, Wealth, and Their Distributions
• Subject: blockchain ; Bitcoin ; fairness ; mining pools ; resource allocation ; mechanism design

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Can, Burak ; Hougaard, Jens Leth ; Pourpouneh, Mohsen
• Event: Veröffentlichung
• (who): University of Copenhagen, Department of Food and Resource Economics (IFRO)
• (where): Copenhagen
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/222974
• Last update: 10.03.2025, 11:41 AM CET