Large transactions in Bitcoin

Level: BA/MA
Responsible person: Benjamin Kraner
Keywords:  Bitcoin, Game-Theory, Consensus

This thesis aims to design and implement a game-theoretic model to analyze how blocks with large transaction fees would disrupt the formation of a blockchain. By treating miners as rational agents, the model will examine strategic behaviors that arise when large transaction fees are offered to disturb consensus. The goal would be to create a simple game-theoretical framework to study Bitcoin consensus and the implication rewards have on the strategies. Building up from a two-player one-shot game to repeated n-player interactions.

References:

Eyal, Ittay, and Emin Gün Sirer. "Majority is not enough: Bitcoin mining is vulnerable." Communications of the ACM 61.7 (2018): 95-102.

Lewenberg, Yoad, et al. "Bitcoin mining pools: A cooperative game theoretic analysis." Proceedings of the 2015 international conference on autonomous agents and multiagent systems. 2015.

Li, Sheng-Nan, Carlo Campajola, and Claudio J. Tessone. "Twisted by the pools: Detection of selfish anomalies in proof-of-work mining." arXiv preprint arXiv:2208.05748 (2022).

Kraner, Benjamin, et al. "Agent-based modelling of bitcoin consensus without block rewards." 2022 IEEE International Conference on Blockchain (Blockchain). IEEE, 2022.