Farsighted Miners under Transaction Fee Mechanism EIP1559
Research output: Chapter in Book/Report/Conference proceeding › Article in proceedings › Research › peer-review
We investigate the recent fee mechanism EIP1559 of the Ethereum network. Whereas previous studies have focused on myopic miners, we here focus on strategic miners in the sense of miners being able to reason about the future blocks. We derive expressions for optimal miner behavior (in terms of setting block sizes) in the case of 2-block foresight and varying degrees of hashing power. Results indicate that a sufficiently large mining pool will have enough hashing power to gain by strategic foresight. We further use a simulation study to examine the impact of both 2-block and 3-block foresight. In particular, the simulation study indicates that for realistic levels of hashing power, mining pools do not gain from being able to reason more than 2 blocks ahead. Moreover, even though the presence of strategic miners increase the variation in block sizes and potentially empty blocks, overall system throughput tend to increase slightly compared to myopic mining.
Original language | English |
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Title of host publication | 2023 IEEE International Conference on Blockchain and Cryptocurrency (ICBC) |
Number of pages | 9 |
Publication date | 2023 |
ISBN (Electronic) | 979-8-3503-1019-1 |
DOIs | |
Publication status | Published - 2023 |
Event | 2023 IEEE International Conference on Blockchain and Cryptocurrency (ICBC) - Dubai, United Arab Emirates Duration: 1 May 2023 → 5 May 2023 |
Conference
Conference | 2023 IEEE International Conference on Blockchain and Cryptocurrency (ICBC) |
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Land | United Arab Emirates |
By | Dubai |
Periode | 01/05/2023 → 05/05/2023 |
ID: 360172611