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

The Combinatorial World (of Auctions) According to GARP

Revealed preference techniques are used to test whether a data set is compatible with rational behaviour. They are also incorporated as constraints in mechanism design to encourage truthful behaviour in applications such as combinatorial auctions. In the auction setting, we present an efficient combinatorial algorithm to find a virtual valuation function with the optimal (additive) rationality guarantee. Moreover, we show that there exists such a valuation function that both is individually rational and is minimum (that is, it is component-wise dominated by any other individually rational, virtual valuation function that approximately fits the data). Similarly, given upper bound constraints on the valuation function, we show how to fit the maximum virtual valuation function with the optimal additive rationality guarantee. In practice, revealed preference bidding constraints are very demanding. We explain how approximate rationality can be used to create relaxed revealed preference constraints in an auction. We then show how combinatorial methods can be used to implement these relaxed constraints. Worst/best-case welfare guarantees that result from the use of such mechanisms can be quantified via the minimum/maximum virtual valuation function

Fractal Markets Hypothesis and the Global Financial Crisis: Scaling, Investment Horizons and Liquidity

We investigate whether fractal markets hypothesis and its focus on liquidity and invest- ment horizons give reasonable predictions about dynamics of the financial markets during the turbulences such as the Global Financial Crisis of late 2000s. Compared to the mainstream efficient markets hypothesis, fractal markets hypothesis considers financial markets as com- plex systems consisting of many heterogenous agents, which are distinguishable mainly with respect to their investment horizon. In the paper, several novel measures of trading activity at different investment horizons are introduced through scaling of variance of the underlying processes. On the three most liquid US indices - DJI, NASDAQ and S&P500 - we show that predictions of fractal markets hypothesis actually fit the observed behavior quite well.Comment: 11 pages, 3 figure

Secure ADS-B authentication system and method

A secure system for authenticating the identity of ADS-B systems, including: an authenticator, including a unique id generator and a transmitter transmitting the unique id to one or more ADS-B transmitters; one or more ADS-B transmitters, including a receiver receiving the unique id, one or more secure processing stages merging the unique id with the ADS-B transmitter's identification, data and secret key and generating a secure code identification and a transmitter transmitting a response containing the secure code and ADSB transmitter's data to the authenticator; the authenticator including means for independently determining each ADS-B transmitter's secret key, a receiver receiving each ADS-B transmitter's response, one or more secure processing stages merging the unique id, ADS-B transmitter's identification and data and generating a secure code, and comparison processing comparing the authenticator-generated secure code and the ADS-B transmitter-generated secure code and providing an authentication signal based on the comparison result

Symmetry of two terminal, non-linear electric conduction

The well-established symmetry relations for linear transport phenomena can not, in general, be applied in the non-linear regime. Here we propose a set of symmetry relations with respect to bias voltage and magnetic field for the non-linear conductance of two-terminal electric conductors. We experimentally confirm these relations using phase-coherent, semiconductor quantum dots.Comment: 4 pages, 4 figure

Electronic structure of strained InP/GaInP quantum dots

We calculate the electronic structure of nm scale InP islands embedded in $Ga_{0.51}In_{0.49}P$. The calculations are done in the envelope approximation and include the effects of strain, piezoelectric polarization, and mixing among 6 valence bands. The electrons are confined within the entire island, while the holes are confined to strain induced pockets. One pocket forms a ring at the bottom of the island near the substrate interface, while the other is above the island in the GaInP. The two sets of hole states are decoupled. Polarization dependent dipole matrix elements are calculated for both types of hole states.Comment: Typographical error corrected in strain Hamiltonia

Scanning Tunneling Microscopy and Tunneling Luminescence of the Surface of GaN Films Grown by Vapor Phase Epitaxy

We report scanning tunneling microscopy (STM) images of surfaces of GaN films and the observation of luminescence from those films induced by highly spatially localized injection of electrons or holes using STM. This combination of scanning tunneling luminescence (STL) with STM for GaN surfaces and the ability to observe both morphology and luminescence in GaN is the first step to investigate possible correlations between surface morphology and optical properties.Comment: 12 pages, Revtex 3.0, submitted to Appl. Phys. Lett., three figures available from Jian Ma at [email protected]

Double Exponential Instability of Triangular Arbitrage Systems

If financial markets displayed the informational efficiency postulated in the efficient markets hypothesis (EMH), arbitrage operations would be self-extinguishing. The present paper considers arbitrage sequences in foreign exchange (FX) markets, in which trading platforms and information are fragmented. In Kozyakin et al. (2010) and Cross et al. (2012) it was shown that sequences of triangular arbitrage operations in FX markets containing 4 currencies and trader-arbitrageurs tend to display periodicity or grow exponentially rather than being self-extinguishing. This paper extends the analysis to 5 or higher-order currency worlds. The key findings are that in a 5-currency world arbitrage sequences may also follow an exponential law as well as display periodicity, but that in higher-order currency worlds a double exponential law may additionally apply. There is an "inheritance of instability" in the higher-order currency worlds. Profitable arbitrage operations are thus endemic rather that displaying the self-extinguishing properties implied by the EMH.Comment: 22 pages, 22 bibliography references, expanded Introduction and Conclusion, added bibliohraphy reference

Behavioral implications of shortlisting procedures

We consider two-stage “shortlisting procedures” in which the menu of alternatives is first pruned by some process or criterion and then a binary relation is maximized. Given a particular first-stage process, our main result supplies a necessary and sufficient condition for choice data to be consistent with a procedure in the designated class. This result applies to any class of procedures with a certain lattice structure, including the cases of “consideration filters,” “satisficing with salience effects,” and “rational shortlist methods.” The theory avoids background assumptions made for mathematical convenience; in this and other respects following Richter’s classical analysis of preference-maximizing choice in the absence of shortlisting