Abstract
The Bitcoin payment system involves two agent types: Users that transact with the currency and pay fees and miners in charge of authorizing transactions and securing the system in return for these fees. Two of Bitcoin's challenges are (i) securing sufficient miner revenues as block rewards decrease, and (ii) alleviating the throughput limitation due to a small maximal block size cap. These issues are strongly related as increasing the maximal block size may decrease revenue due to Bitcoin's pay-your-bid approach. To decouple them, we analyze the “monopolistic auction” [8], showing: (i) its revenue does not decrease as the maximal block size increases, (ii) it is resilient to an untrusted auctioneer (the miner), and (iii) simplicity for transaction issuers (bidders), as the average gain from strategic bid shading (relative to bidding one's true maximal willingness to pay) diminishes as the number of bids increases.
| Original language | English |
|---|---|
| Title of host publication | The Web Conference 2019 - Proceedings of the World Wide Web Conference, WWW 2019 |
| Publisher | Association for Computing Machinery, Inc |
| Pages | 2950-2956 |
| Number of pages | 7 |
| ISBN (Electronic) | 9781450366748 |
| DOIs | |
| State | Published - 13 May 2019 |
| Event | 2019 World Wide Web Conference, WWW 2019 - San Francisco, United States Duration: 13 May 2019 → 17 May 2019 |
Publication series
| Name | The Web Conference 2019 - Proceedings of the World Wide Web Conference, WWW 2019 |
|---|
Conference
| Conference | 2019 World Wide Web Conference, WWW 2019 |
|---|---|
| Country/Territory | United States |
| City | San Francisco |
| Period | 13/05/19 → 17/05/19 |
Bibliographical note
Publisher Copyright:© 2019 IW3C2 (International World Wide Web Conference Committee), published under Creative Commons CC-BY 4.0 License.
Keywords
- Auction-Theory
- Bitcoin
- Blockchain
- Cryptocurrency
- Fee-market