318 research outputs found
Cloud/fog computing resource management and pricing for blockchain networks
The mining process in blockchain requires solving a proof-of-work puzzle,
which is resource expensive to implement in mobile devices due to the high
computing power and energy needed. In this paper, we, for the first time,
consider edge computing as an enabler for mobile blockchain. In particular, we
study edge computing resource management and pricing to support mobile
blockchain applications in which the mining process of miners can be offloaded
to an edge computing service provider. We formulate a two-stage Stackelberg
game to jointly maximize the profit of the edge computing service provider and
the individual utilities of the miners. In the first stage, the service
provider sets the price of edge computing nodes. In the second stage, the
miners decide on the service demand to purchase based on the observed prices.
We apply the backward induction to analyze the sub-game perfect equilibrium in
each stage for both uniform and discriminatory pricing schemes. For the uniform
pricing where the same price is applied to all miners, the existence and
uniqueness of Stackelberg equilibrium are validated by identifying the best
response strategies of the miners. For the discriminatory pricing where the
different prices are applied to different miners, the Stackelberg equilibrium
is proved to exist and be unique by capitalizing on the Variational Inequality
theory. Further, the real experimental results are employed to justify our
proposed model.Comment: 16 pages, double-column version, accepted by IEEE Internet of Things
Journa
Integration of Blockchain and Auction Models: A Survey, Some Applications, and Challenges
In recent years, blockchain has gained widespread attention as an emerging
technology for decentralization, transparency, and immutability in advancing
online activities over public networks. As an essential market process,
auctions have been well studied and applied in many business fields due to
their efficiency and contributions to fair trade. Complementary features
between blockchain and auction models trigger a great potential for research
and innovation. On the one hand, the decentralized nature of blockchain can
provide a trustworthy, secure, and cost-effective mechanism to manage the
auction process; on the other hand, auction models can be utilized to design
incentive and consensus protocols in blockchain architectures. These
opportunities have attracted enormous research and innovation activities in
both academia and industry; however, there is a lack of an in-depth review of
existing solutions and achievements. In this paper, we conduct a comprehensive
state-of-the-art survey of these two research topics. We review the existing
solutions for integrating blockchain and auction models, with some
application-oriented taxonomies generated. Additionally, we highlight some open
research challenges and future directions towards integrated blockchain-auction
models
Stablecoins 2.0: Economic Foundations and Risk-based Models
Stablecoins are one of the most widely capitalized type of cryptocurrency.
However, their risks vary significantly according to their design and are often
poorly understood. We seek to provide a sound foundation for stablecoin theory,
with a risk-based functional characterization of the economic structure of
stablecoins. First, we match existing economic models to the disparate set of
custodial systems. Next, we characterize the unique risks that emerge in
non-custodial stablecoins and develop a model framework that unifies existing
models from economics and computer science. We further discuss how this
modeling framework is applicable to a wide array of cryptoeconomic systems,
including cross-chain protocols, collateralized lending, and decentralized
exchanges. These unique risks yield unanswered research questions that will
form the crux of research in decentralized finance going forward
Incentive Analysis of Blockchain Technology
Blockchain technology was invented in the Bitcoin whitepaper released in 2008. Since then, several decentralized cryptocurrencies and applications have become mainstream. There has been an immense amount of engineering effort put into developing blockchain networks. Relatively few projects backed by blockchain technology have succeeded and maintained a large community of developers, users, and customers, while many popular projects with billions of dollars in funding and market capitalizations have turned out to be complete scams.
This thesis discusses the technological innovations introduced in the Bitcoin whitepaper and the following work of the last fifteen years that has enabled blockchain technology. A complete implementation of a blockchain network and cryptocurrency based on first principles is presented in order to illustrate the design and technical choices that have to be made while implementing a blockchain.
To understand the incentives that drive the adoption of blockchain technology, two successful blockchain projects, Crypto Kitties, which is a Non-Fungible Token (NFT) project based on the ERC-721 specification and Helium, are analysed as case studies. These case studies first examine how these projects leveraged blockchain technology from a technical standpoint, followed by a discussion of the incentives that were built into the projects, which allowed millions of users to participate in these networks and create value.
The economic incentives created by Crypto-assets which are a combination of cryptocurrency and tokens, are explored. The purpose of this thesis is to provide an informational overview of the incentives and technical choices driving the development and adoption of blockchain technology
Socially Optimal Mining Pools
Mining for Bitcoins is a high-risk high-reward activity. Miners, seeking to
reduce their variance and earn steadier rewards, collaborate in 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 (i.e., methods
for distributing the rewards) are in use for Bitcoin mining.
We here propose a formal model of utility and social welfare for Bitcoin
mining (and analogous mining systems) based on the theory of discounted
expected utility, and next study pooling strategies that maximize the social
welfare of miners. 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
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