A Survey on Blockchain: A Game Theoretical Perspective
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paper_title: Practical byzantine fault tolerance and proactive recovery

paper_content:

Our growing reliance on online services accessible on the Internet demands highly available systems that provide correct service without interruptions. Software bugs, operator mistakes, and malicious attacks are a major cause of service interruptions and they can cause arbitrary behavior, that is, Byzantine faults. This article describes a new replication algorithm, BFT, that can be used to build highly available systems that tolerate Byzantine faults. BFT can be used in practice to implement real services: it performs well, it is safe in asynchronous environments such as the Internet, it incorporates mechanisms to defend against Byzantine-faulty clients, and it recovers replicas proactively. The recovery mechanism allows the algorithm to tolerate any number of faults over the lifetime of the system provided fewer than 1/3 of the replicas become faulty within a small window of vulnerability. BFT has been implemented as a generic program library with a simple interface. We used the library to implement the first Byzantine-fault-tolerant NFS file system, BFS. The BFT library and BFS perform well because the library incorporates several important optimizations, the most important of which is the use of symmetric cryptography to authenticate messages. The performance results show that BFS performs 2p faster to 24p slower than production implementations of the NFS protocol that are not replicated. This supports our claim that the BFT library can be used to build practical systems that tolerate Byzantine faults.
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paper_title: The Ripple Protocol Consensus Algorithm

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While several consensus algorithms exist for the Byzantine Generals Problem, specifically as it pertains to distributed payment systems, many suffer from high latency induced by the requirement that all nodes within the network communicate synchronously. In this work, we present a novel consensus algorithm that circumvents this requirement by utilizing collectively-trusted subnetworks within the larger network. We show that the “trust” required of these subnetworks is in fact minimal and can be further reduced with principled choice of the member nodes. In addition, we show that minimal connectivity is required to maintain agreement throughout the whole network. The result is a low-latency consensus algorithm which still maintains robustness in the face of Byzantine failures. We present this algorithm in its embodiment in the Ripple Protocol.
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paper_title: Applications of Blockchains in the Internet of Things: A Comprehensive Survey

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The blockchain technology has revolutionized the digital currency space with the pioneering cryptocurrency platform named Bitcoin. From an abstract perspective, a blockchain is a distributed ledger capable of maintaining an immutable log of transactions happening in a network. In recent years, this technology has attracted significant scientific interest in research areas beyond the financial sector, one of them being the Internet of Things (IoT). In this context, the blockchain is seen as the missing link toward building a truly decentralized, trustless, and secure environment for the IoT and, in this survey, we aim to shape a coherent and comprehensive picture of the current state-of-the-art efforts in this direction. We start with fundamental working principles of blockchains and how blockchain-based systems achieve the characteristics of decentralization, security, and auditability. From there, we build our narrative on the challenges posed by the current centralized IoT models, followed by recent advances made both in industry and research to solve these challenges and effectively use blockchains to provide a decentralized, secure medium for the IoT.
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paper_title: Security Services Using Blockchains: A State of the Art Survey

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This paper surveys blockchain-based approaches for several security services. These services include authentication, confidentiality, privacy and access control list, data and resource provenance, and integrity assurance. All these services are critical for the current distributed applications, especially due to the large amount of data being processed over the networks and the use of cloud computing. Authentication ensures that the user is who he/she claims to be. Confidentiality guarantees that data cannot be read by unauthorized users. Privacy provides the users the ability to control who can access their data. Provenance allows an efficient tracking of the data and resources along with their ownership and utilization over the network. Integrity helps in verifying that the data has not been modified or altered. These services are currently managed by centralized controllers, for example, a certificate authority. Therefore, the services are prone to attacks on the centralized controller. On the other hand, blockchain is a secured and distributed ledger that can help resolve many of the problems with centralization. The objectives of this paper are to give insights on the use of security services for current applications, to highlight the state of the art techniques that are currently used to provide these services, to describe their challenges, and to discuss how the blockchain technology can resolve these challenges. Further, several blockchain-based approaches providing such security services are compared thoroughly. Challenges associated with using blockchain-based security services are also discussed to spur further research in this area.
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paper_title: Healthcare Data Gateways: Found Healthcare Intelligence on Blockchain with Novel Privacy Risk Control

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Healthcare data are a valuable source of healthcare intelligence. Sharing of healthcare data is one essential step to make healthcare system smarter and improve the quality of healthcare service. Healthcare data, one personal asset of patient, should be owned and controlled by patient, instead of being scattered in different healthcare systems, which prevents data sharing and puts patient privacy at risks. Blockchain is demonstrated in the financial field that trusted, auditable computing is possible using a decentralized network of peers accompanied by a public ledger. In this paper, we proposed an App (called Healthcare Data Gateway (HGD)) architecture based on blockchain to enable patient to own, control and share their own data easily and securely without violating privacy, which provides a new potential way to improve the intelligence of healthcare systems while keeping patient data private. Our proposed purpose-centric access model ensures patient own and control their healthcare data; simple unified Indicator-Centric Schema (ICS) makes it possible to organize all kinds of personal healthcare data practically and easily. We also point out that MPC (Secure Multi-Party Computing) is one promising solution to enable untrusted third-party to conduct computation over patient data without violating privacy.
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paper_title: Constrained Markov Decision Processes

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INTRODUCTION Examples of Constrained Dynamic Control Problems On Solution Approaches for CMDPs with Expected Costs Other Types of CMDPs Cost Criteria and Assumptions The Convex Analytical Approach and Occupation Measures Linear Programming and Lagrangian Approach for CMDPs About the Methodology The Structure of the Book PART ONE: FINITE MDPS MARKOV DECISION PROCESSES The Model Cost Criteria and the Constrained Problem Some Notation The Dominance of Markov Policies THE DISCOUNTED COST Occupation Measure and the Primal LP Dynamic Programming and Dual LP: the Unconstrained Case Constrained Control: Lagrangian Approach The Dual LP Number of Randomizations THE EXPECTED AVERAGE COST Occupation Measure and the Primal LP Equivalent Linear Program The Dual Program Number of Randomizations FLOW AND SERVICE CONTROL IN A SINGLE-SERVER QUEUE The Model The Lagrangian The Original Constrained Problem Structure of Randomization and Implementation Issues On Coordination Between Controllers Open Questions PART TWO: INFINITE MDPS MDPS WITH INFINITE STATE AND ACTION SPACES The Model Cost Criteria Mixed Policies, and Topologic Structures The Dominance of Markov Policies Aggregation of States Extra Randomization in the Policies Equivalent Quasi-Markov Model and Quasi-Markov Policies THE TOTAL COST: CLASSIFICATION OF MDPS Transient and Absorbing MDPs MDPs With Uniform Lyapunov Functions Equivalence of MDP With Unbounded and bounded costs Properties of MDPs With Uniform Lyapunov Functions Properties for Fixed Initial Distribution Examples of Uniform Lyapunov Functions Contracting MDPs THE TOTAL COST: OCCUPATION MEASURES AND THE PRIMAL LP Occupation Measure Continuity of Occupation Measures More Properties of MDPs Characterization of Achievable Sets of Occupation Measure Relation Between Cost and Occupation Measure Dominating Classes of Policies Equivalent Linear Program The Dual Program THE TOTAL COST: DYNAMIC AND LINEAR PROGRAMMING Non-Constrained Control: Dynamic and Linear Programming Superharmonic Functions and Linear Programming Set of Achievable Costs Constrained Control: Lagrangian Approach The Dual LP State Truncation A Second LP Approach for Optimal Mixed Policies More on Unbound Costs THE DISCOUNTED COST The Equivalent Total Cost Model Occupation Measure and LP Non-negative Immediate Cost Weak Contracting Assumptions and Lyapunov Functions Example: Flow and Service Control THE EXPECTED AVERAGE COST Occupation Measures Completeness Properties of Stationary Policies Relation Between Cost and Occupation Measure Dominating Classes of Policies Equivalent Linear Program The Dual Program The Contracting Framework Other Conditions for the Uniform Integrability The Case of Uniform Lyapunov Conditions EXPECTED AVERAGE COST: DYNAMIC PROGRAMMING AND LP The Non-Constrained Case: Optimality Inequality Non-Constrained Control: Cost Bounded Below Dynamic Programming and Uniform Lyapunov Function Super-Harmonic Functions and Linear Programming Set of Achievable Costs Constrained Control: Lagrangian Approach The Dual LP A Second LP Approach for Optimal Mixed Policies PART THREE: ASYMPTOTIC METHODS AND APPROXIMATIONS SENSITIVITY ANALYSIS Introduction Approximation of the Values Approximation and Robustness of the Policies CONVERGENCE OF DISCOUNTED CONSTRAINED MDPS Convergence in the Discount Factor Convergence to the Expected Average Cost The Case of Uniform Lyapunov Function CONVERGENCE AS THE HORIZON TENDS TO INFINITY The Discounted Cost The Expected Average Cost: Stationary Policies The Expected Average Cost: General Policies STATE TRUNCATION AND APPROXIMATION The Approximating sets of States Scheme I: the Total Cost Scheme II: the Total Cost Scheme III: the Total Cost The Expected Average Cost Infinite MDPs: on the Number of Randomizations APPENDIX: CONVERGENCE OF PROBABILITY MEASURES REFERENCES LIST OF SYMBOLS AND NOTATION INDEX
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paper_title: Integrated Blockchain and Edge Computing Systems: A Survey, Some Research Issues and Challenges

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Blockchain, as the underlying technology of crypto-currencies, has attracted significant attention. It has been adopted in numerous applications, such as smart grid and Internet-of-Things. However, there is a significant scalability barrier for blockchain, which limits its ability to support services with frequent transactions. On the other side, edge computing is introduced to extend the cloud resources and services to be distributed at the edge of the network, but currently faces challenges in its decentralized management and security. The integration of blockchain and edge computing into one system can enable reliable access and control of the network, storage, and computation distributed at the edges, hence providing a large scale of network servers, data storage, and validity computation near the end in a secure manner. Despite the prospect of integrated blockchain and edge computing systems, its scalability enhancement, self organization, functions integration, resource management, and new security issues remain to be addressed before widespread deployment. In this survey, we investigate some of the work that has been done to enable the integrated blockchain and edge computing system and discuss the research challenges. We identify several vital aspects of the integration of blockchain and edge computing: motivations, frameworks, enabling functionalities, and challenges. Finally, some broader perspectives are explored.
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paper_title: Bitcoin and Beyond: A Technical Survey on Decentralized Digital Currencies

paper_content:

Besides attracting a billion dollar economy, Bitcoin revolutionized the field of digital currencies and influenced many adjacent areas. This also induced significant scientific interest. In this survey, we unroll and structure the manyfold results and research directions. We start by introducing the Bitcoin protocol and its building blocks. From there we continue to explore the design space by discussing existing contributions and results. In the process, we deduce the fundamental structures and insights at the core of the Bitcoin protocol and its applications. As we show and discuss, many key ideas are likewise applicable in various other fields, so that their impact reaches far beyond Bitcoin itself.
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paper_title: A Blockchain Framework for Insurance Processes

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We design a distributed platform with blockchain as a system service for supporting transaction execution in insurance processes. The insurance industry is heavily dependent on multiple processes between transacting parties for initiating, maintaining and closing diverse kind of policies. Transaction processing time, payment settlement time and security protection of the process execution are major concerns. Blockchain technology, originally conceived as an immutable distributed ledger for detecting double spending of cryptocurrencies, is now increasingly used in different FinTech systems to address productivity and security requirements. The application of blockchain in FinTech processing requires a deep understanding of the underlying business processes. It supports automated interactions between the blockchain and existing transaction systems through the notion of smart contracts. In this paper, we focus on the design of an efficient approach for processing insurance related transactions based on a blockchain-enabled platform. An experimental prototype is developed on Hyperledger fabric, an open source permissioned blockchain design framework. We discuss the main design requirements, corresponding design propositions, and encode various insurance processes as smart contracts. Extensive experiments were conducted to analyze performance of our framework and security of the proposed design.
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paper_title: Blockchain challenges and opportunities: a survey

paper_content:

Blockchain has numerous benefits such as decentralisation, persistency, anonymity and auditability. There is a wide spectrum of blockchain applications ranging from cryptocurrency, financial services, risk management, internet of things (IoT) to public and social services. Although a number of studies focus on using the blockchain technology in various application aspects, there is no comprehensive survey on the blockchain technology in both technological and application perspectives. To fill this gap, we conduct a comprehensive survey on the blockchain technology. In particular, this paper gives the blockchain taxonomy, introduces typical blockchain consensus algorithms, reviews blockchain applications and discusses technical challenges as well as recent advances in tackling the challenges. Moreover, this paper also points out the future directions in the blockchain technology.
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paper_title: A Digital Signature Based on a Conventional Encryption Function

paper_content:

A new digital signature based only on a conventional encryption function (such as DES) is described which is as secure as the underlying encryption function -- the security does not depend on the difficulty of factoring and the high computational costs of modular arithmetic are avoided. The signature system can sign an unlimited number of messages, and the signature size increases logarithmically as a function of the number of messages signed. Signature size in a 'typical' system might range from a few hundred bytes to a few kilobytes, and generation of a signature might require a few hundred to a few thousand computations of the underlying conventional encryption function.
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paper_title: Bitcoin and Beyond: A Technical Survey on Decentralized Digital Currencies

paper_content:

Besides attracting a billion dollar economy, Bitcoin revolutionized the field of digital currencies and influenced many adjacent areas. This also induced significant scientific interest. In this survey, we unroll and structure the manyfold results and research directions. We start by introducing the Bitcoin protocol and its building blocks. From there we continue to explore the design space by discussing existing contributions and results. In the process, we deduce the fundamental structures and insights at the core of the Bitcoin protocol and its applications. As we show and discuss, many key ideas are likewise applicable in various other fields, so that their impact reaches far beyond Bitcoin itself.
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paper_title: The Economics of Bitcoin Mining, or Bitcoin in the Presence of Adversaries

paper_content:

The Bitcoin digital currency depends for its correctness and stability on a combination of cryptography, distributed algorithms, and incentivedriven behavior. We examine Bitcoin as a consensus game and determine that it relies on separate consensus about the rules and about game state. An important aspect of Bitcoin’s design is the mining mechanism, in which participants expend resources on solving computational puzzles in order to collect rewards. This mechanism purportedly protects Bitcoin against certain technical problems such as inconsistencies in the system’s distributed log data structure. We consider the economics of Bitcoin mining, and whether the Bitcoin protocol can survive attacks, assuming that participants behave according to their incentives. We show that there is a Nash equilibrium in which all players behave consistently with Bitcoin’s reference implementation, along with innitely many equilibria in which they behave otherwise. We also show how a motivated adversary might be able to disrupt the Bitcoin system and \crash" the currency. Finally, we argue that Bitcoin will require the emergence of governance structures, contrary to the commonly held view in the Bitcoin community that the currency is ungovernable.
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paper_title: Bitcoin Mining as a Contest

paper_content:

This paper presents a simple game theoretic framework, assuming complete information, to model Bitcoin mining activity. It does so by formalizing the activity as an all-pay contest: a competition where participants contend with each other to win a prize by investing in computational power, and victory is probabilistic. With at least two active miners, the unique pure strategy Nash equilibrium of the game suggests the following interesting insights on the motivation for being a miner: while the optimal amount of energy consumption depends also on the reward for solving the puzzle, as long as the reward is positive the decision to be an active miner depends only on the mining costs. Moreover, the intrinsic structure of the mining activity seems to prevent the formation of a monopoly, because in an equilibrium with two miners, both of them will have positive expected profits for any level of the opponent’s costs. A monopoly could only form if the rate of return on investment were higher outside bitcoin.
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paper_title: A Survey on the Security of Blockchain Systems

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Since its inception, the blockchain technology has shown promising application prospects. From the initial cryptocurrency to the current smart contract, blockchain has been applied to many fields. Although there are some studies on the security and privacy issues of blockchain, there lacks a systematic examination on the security of blockchain systems. In this paper, we conduct a systematic study on the security threats to blockchain and survey the corresponding real attacks by examining popular blockchain systems. We also review the security enhancement solutions for blockchain, which could be used in the development of various blockchain systems, and suggest some future directions to stir research efforts into this area.
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paper_title: Ouroboros: A Provably Secure Proof-of-Stake Blockchain Protocol

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We present “Ouroboros”, the first blockchain protocol based on proof of stake with rigorous security guarantees. We establish security properties for the protocol comparable to those achieved by the bitcoin blockchain protocol. As the protocol provides a “proof of stake” blockchain discipline, it offers qualitative efficiency advantages over blockchains based on proof of physical resources (e.g., proof of work). We also present a novel reward mechanism for incentivizing Proof of Stake protocols and we prove that, given this mechanism, honest behavior is an approximate Nash equilibrium, thus neutralizing attacks such as selfish mining.
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paper_title: Incentive Compatibility of Bitcoin Mining Pool Reward Functions

paper_content:

In this paper we introduce a game-theoretic model for reward functions in Bitcoin mining pools. Our model consists only of an unordered history of reported shares and gives participating miners the strategy choices of either reporting or delaying when they discover a share or full solution. We defined a precise condition for incentive compatibility to ensure miners strategy choices optimize the welfare of the pool as a whole. With this definition we show that proportional mining rewards are not incentive compatible in this model. We introduce and analyze a novel reward function which is incentive compatible in this model. Finally we show that the popular reward function pay-per-last-N-shares is also incentive compatible in a more general model.
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paper_title: Blockchain challenges and opportunities: a survey

paper_content:

Blockchain has numerous benefits such as decentralisation, persistency, anonymity and auditability. There is a wide spectrum of blockchain applications ranging from cryptocurrency, financial services, risk management, internet of things (IoT) to public and social services. Although a number of studies focus on using the blockchain technology in various application aspects, there is no comprehensive survey on the blockchain technology in both technological and application perspectives. To fill this gap, we conduct a comprehensive survey on the blockchain technology. In particular, this paper gives the blockchain taxonomy, introduces typical blockchain consensus algorithms, reviews blockchain applications and discusses technical challenges as well as recent advances in tackling the challenges. Moreover, this paper also points out the future directions in the blockchain technology.
---
paper_title: Blockchain challenges and opportunities: a survey

paper_content:

Blockchain has numerous benefits such as decentralisation, persistency, anonymity and auditability. There is a wide spectrum of blockchain applications ranging from cryptocurrency, financial services, risk management, internet of things (IoT) to public and social services. Although a number of studies focus on using the blockchain technology in various application aspects, there is no comprehensive survey on the blockchain technology in both technological and application perspectives. To fill this gap, we conduct a comprehensive survey on the blockchain technology. In particular, this paper gives the blockchain taxonomy, introduces typical blockchain consensus algorithms, reviews blockchain applications and discusses technical challenges as well as recent advances in tackling the challenges. Moreover, this paper also points out the future directions in the blockchain technology.
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paper_title: On the Instability of Bitcoin Without the Block Reward

paper_content:

Bitcoin provides two incentives for miners: block rewards and transaction fees. The former accounts for the vast majority of miner revenues at the beginning of the system, but it is expected to transition to the latter as the block rewards dwindle. There has been an implicit belief that whether miners are paid by block rewards or transaction fees does not affect the security of the block chain. We show that this is not the case. Our key insight is that with only transaction fees, the variance of the block reward is very high due to the exponentially distributed block arrival time, and it becomes attractive to fork a "wealthy" block to "steal" the rewards therein. We show that this results in an equilibrium with undesirable properties for Bitcoin's security and performance, and even non-equilibria in some circumstances. We also revisit selfish mining and show that it can be made profitable for a miner with an arbitrarily low hash power share, and who is arbitrarily poorly connected within the network. Our results are derived from theoretical analysis and confirmed by a new Bitcoin mining simulator that may be of independent interest. We discuss the troubling implications of our results for Bitcoin's future security and draw lessons for the design of new cryptocurrencies.
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paper_title: Bitcoin Mining as a Contest

paper_content:

This paper presents a simple game theoretic framework, assuming complete information, to model Bitcoin mining activity. It does so by formalizing the activity as an all-pay contest: a competition where participants contend with each other to win a prize by investing in computational power, and victory is probabilistic. With at least two active miners, the unique pure strategy Nash equilibrium of the game suggests the following interesting insights on the motivation for being a miner: while the optimal amount of energy consumption depends also on the reward for solving the puzzle, as long as the reward is positive the decision to be an active miner depends only on the mining costs. Moreover, the intrinsic structure of the mining activity seems to prevent the formation of a monopoly, because in an equilibrium with two miners, both of them will have positive expected profits for any level of the opponent’s costs. A monopoly could only form if the rate of return on investment were higher outside bitcoin.
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paper_title: Incentive Compatibility of Bitcoin Mining Pool Reward Functions

paper_content:

In this paper we introduce a game-theoretic model for reward functions in Bitcoin mining pools. Our model consists only of an unordered history of reported shares and gives participating miners the strategy choices of either reporting or delaying when they discover a share or full solution. We defined a precise condition for incentive compatibility to ensure miners strategy choices optimize the welfare of the pool as a whole. With this definition we show that proportional mining rewards are not incentive compatible in this model. We introduce and analyze a novel reward function which is incentive compatible in this model. Finally we show that the popular reward function pay-per-last-N-shares is also incentive compatible in a more general model.
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paper_title: Blockchain Without Waste: Proof-of-Stake

paper_content:

Permissionless blockchains require a protocol to generate consensus. Many prominent blockchains (e.g., Bitcoin and Ethereum) employ Proof-of-Work (PoW) for that purpose, but PoW possesses significant shortcomings. Various alternatives have been proposed. This paper provides the first formal economic model of the most famous alternative, Proof-of-Stake (PoS), and establishes conditions under which PoS generates consensus. A sufficiently modest reward schedule not only implies existence of an equilibrium in which consensus obtains as soon as possible but also precludes a persistent forking equilibrium. The latter result arises because PoS, unlike PoW, requires that validators hold stake.
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paper_title: Tokenomics: Dynamic Adoption and Valuation

paper_content:

We provide a dynamic asset-pricing model of (crypto-)tokens on (blockchain-based) platforms, and highlight their roles on endogenous user adoption. Tokens intermediate transactions on decentralized networks, and their trading creates an inter-temporal complementarity among users, generating a feedback loop between token valuation and platform adoption. Consequently, tokens capitalize future platform growth, accelerate adoption, and reduce user-base volatility. Equilibrium token price increases non-linearly in platform productivity, user heterogeneity, and endogenous network size. The model also produces explosive growth of user base after an initial period of dormant adoption, accompanied by a run-up of token price volatility. We further discuss how our framework can be used to discuss cryptocurrency supply, token competition, and pricing assets under network externality.
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paper_title: When Mobile Blockchain Meets Edge Computing

paper_content:

Blockchain, as the backbone technology of the current popular Bitcoin digital currency, has become a promising decentralized data management framework. Although blockchain has been widely adopted in many applications, e.g., finance, healthcare, and logistics, its application in mobile services is still limited. This is due to the fact that blockchain users need to solve preset proof-of-work puzzles to add new data, i.e., a block, to the blockchain. Solving the proof-of-work, however, consumes substantial resources in terms of CPU time and energy, which is not suitable for resource-limited mobile devices. To facilitate blockchain applications in future mobile Internet of Things systems, multiple access mobile edge computing appears to be an auspicious solution to solve the proof-of-work puzzles for mobile users. We first introduce a novel concept of edge computing for mobile blockchain. Then, we introduce an economic approach for edge computing resource management. Moreover, a prototype of mobile edge computing enabled blockchain systems is presented with experimental results to justify the proposed concept.
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paper_title: Optimal Pricing-Based Edge Computing Resource Management in Mobile Blockchain

paper_content:

As the core issue of blockchain, the mining requires solving a proof-of-work puzzle, which is resource expensive to implement in mobile devices due to high computing power needed. Thus, the development of blockchain in mobile applications is restricted. In this paper, we consider the edge computing as the network enabler for mobile blockchain. In particular, we study optimal pricing-based edge computing resource management to support mobile blockchain applications where the mining process can be offloaded to an Edge computing Service Provider (ESP). We adopt a two-stage Stackelberg game to jointly maximize the profit of the ESP and the individual utilities of different miners. In Stage I, the ESP sets the price of edge computing services. In Stage II, 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 uniform and discriminatory pricing schemes. Further, the existence and uniqueness of Stackelberg game are validated for both pricing schemes. At last, the performance evaluation shows that the ESP intends to set the maximum possible value as the optimal price for profit maximization under uniform pricing. In addition, the discriminatory pricing helps the ESP encourage higher total service demand from miners and achieve greater profit correspondingly.
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paper_title: On Cyber Risk Management of Blockchain Networks: A Game Theoretic Approach

paper_content:

Open-access blockchains based on proof-of-work protocols have gained tremendous popularity for their capabilities of providing decentralized tamper-proof ledgers and platforms for data-driven autonomous organization. Nevertheless, the proof-of-work based consensus protocols are vulnerable to cyber-attacks such as double-spending. In this paper, we propose a novel approach of cyber risk management for blockchain-based service. In particular, we adopt the cyber-insurance as an economic tool for neutralizing cyber risks due to attacks in blockchain networks. We consider a blockchain service market, which is composed of the infrastructure provider, the blockchain provider, the cyber-insurer, and the users. The blockchain provider purchases from the infrastructure provider, e.g., a cloud, the computing resources to maintain the blockchain consensus, and then offers blockchain services to the users. The blockchain provider strategizes its investment in the infrastructure and the service price charged to the users, in order to improve the security of the blockchain and thus optimize its profit. Meanwhile, the blockchain provider also purchases a cyber-insurance from the cyber-insurer to protect itself from the potential damage due to the attacks. In return, the cyber-insurer adjusts the insurance premium according to the perceived risk level of the blockchain service. Based on the assumption of rationality for the market entities, we model the interaction among the blockchain provider, the users, and the cyber-insurer as a two-level Stackelberg game. Namely, the blockchain provider and the cyber-insurer lead to set their pricing/investment strategies, and then the users follow to determine their demand of the blockchain service. Specifically, we consider the scenario of double-spending attacks and provide a series of analytical results about the Stackelberg equilibrium in the market game.
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paper_title: Solving the Buyer and Seller’s Dilemma: A Dual-Deposit Escrow Smart Contract for Provably Cheat-Proof Delivery and Payment for a Digital Good without a Trusted Mediator

paper_content:

A fundamental problem for electronic commerce is the buying and selling of digital goods between individuals that may not know or trust each other. Traditionally, this problem has been addressed by the use of trusted third-parties such as credit-card companies, mediated escrows, legal adjudication, or reputation systems. Despite the rise of blockchain protocols as a way to send payments without trusted third parties, the important problem of exchanging a digital good for payment without trusted third parties has been paid much less attention. We refer to this problem as the Buyer and Seller’s Dilemma and present for it a dual-deposit escrow trade protocol which uses double-sided payment deposits in conjunction with simple cryptographic primitives, and that can be implemented using a blockchain-based smart contract. We analyze our protocol as an extensive-form game and prove that the Sub-game Perfect Nash Equilibrium for this game is for both the buyer and seller to cooperate and behave honestly. We address this problem under the assumption that the digital good being traded is known and verifiable, with a fixed price known to both parties.
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paper_title: Incentivizing Consensus Propagation in Proof-of-Stake Based Consortium Blockchain Networks

paper_content:

In proof-of-stake based consortium blockchain networks, pre-selected miners compete to solve a crypto-puzzle with a successfully mining probability proportional to the amount of their stakes. When the puzzle is solved, the miners are encouraged to take part in mined block propagation for verification to win a transaction fee from the blockchain user. The mined block should be propagated over wired or wireless networks, and be verified as quickly as possible to decrease consensus propagation delay. In this letter, we study incentivizing the consensus propagation considering the tradeoff between the network delay of block propagation process and offered transaction fee from the blockchain user. A Stackelberg game is then formulated to jointly maximize utility of the blockchain user and individual profit of the miners. The blockchain user acting as the leader sets the transaction fee for block verification. The miners acting as the followers decide on the number of recruited verifiers over wired or wireless networks. We apply the backward induction to analyze the existence and uniqueness of the Stackelberg equilibrium. Performance evaluation validates the feasibility and efficiency of the proposed game model in consensus propagation.
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paper_title: Betrayal, Distrust, and Rationality: Smart Counter-Collusion Contracts for Verifiable Cloud Computing

paper_content:

Cloud computing has become an irreversible trend. Together comes the pressing need for verifiability, to assure the client the correctness of computation outsourced to the cloud. Existing verifiable computation techniques all have a high overhead, thus if being deployed in the clouds, would render cloud computing more expensive than the on-premises counterpart. To achieve verifiability at a reasonable cost, we leverage game theory and propose a smart contract based solution. In a nutshell, a client lets two clouds compute the same task, and uses smart contracts to stimulate tension, betrayal and distrust between the clouds, so that rational clouds will not collude and cheat. In the absence of collusion, verification of correctness can be done easily by crosschecking the results from the two clouds. We provide a formal analysis of the games induced by the contracts, and prove that the contracts will be effective under certain reasonable assumptions. By resorting to game theory and smart contracts, we are able to avoid heavy cryptographic protocols. The client only needs to pay two clouds to compute in the clear, and a small transaction fee to use the smart contracts. We also conducted a feasibility study that involves implementing the contracts in Solidity and running them on the official Ethereum network.
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paper_title: Decentralized Mining in Centralized Pools

paper_content:

The rise of centralized mining pools for risk sharing does not necessarily undermine the decentralization required for permissionless blockchains: Each individual miner's cross-pool diversification and endogenous fees charged by pools generally sustain decentralization, because larger pools better internalize their externality on global hash rates, charge higher fees, attract disproportionately fewer miners, and thus grow more slowly. Instead, mining pools as a financial innovation escalate the arms race among competing miners and thus significantly increase the energy consumption of proof-of-work-based consensus mechanisms. Empirical evidence from Bitcoin mining supports our model predictions. The economic insights inform many other blockchain protocols as well as the industrial organization of mainstream sectors with similar characteristics but ambiguous prior findings.
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paper_title: The Economics of Bitcoin Mining, or Bitcoin in the Presence of Adversaries

paper_content:

The Bitcoin digital currency depends for its correctness and stability on a combination of cryptography, distributed algorithms, and incentivedriven behavior. We examine Bitcoin as a consensus game and determine that it relies on separate consensus about the rules and about game state. An important aspect of Bitcoin’s design is the mining mechanism, in which participants expend resources on solving computational puzzles in order to collect rewards. This mechanism purportedly protects Bitcoin against certain technical problems such as inconsistencies in the system’s distributed log data structure. We consider the economics of Bitcoin mining, and whether the Bitcoin protocol can survive attacks, assuming that participants behave according to their incentives. We show that there is a Nash equilibrium in which all players behave consistently with Bitcoin’s reference implementation, along with innitely many equilibria in which they behave otherwise. We also show how a motivated adversary might be able to disrupt the Bitcoin system and \crash" the currency. Finally, we argue that Bitcoin will require the emergence of governance structures, contrary to the commonly held view in the Bitcoin community that the currency is ungovernable.
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paper_title: The blockchain folk theorem

paper_content:

Blockchains are distributed ledgers, operated within peer-to-peer networks. We model the proof-of-work blockchain protocol as a stochastic game and analyze the equilibrium strategies of rational, strategic miners. Mining the longest chain is a Markov perfect equilibrium, without forking, in line with Nakamoto (2008). The blockchain protocol, however, is a coordination game, with multiple equilibria. There exist equilibria with forks, leading to orphaned blocks and persistent divergence between chains. We also show how forks can be generated by information delays and software upgrades. Last we identify negative externalities implying that equilibrium investment in computing capacity is excessive
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paper_title: Stochastic Games.

paper_content:

In a stochastic game the play proceeds by steps from position to position, according to transition probabilities controlled jointly by the two players. We shall assume a finite number, N , of positions, and finite numbers m K , n K of choices at each position; nevertheless, the game may not be bounded in length. If, when at position k , the players choose their i th and j th alternatives, respectively, then with probability s i j k > 0 the game stops, while with probability p i j k l the game moves to position l . Define s = min k , i , j s i j k . Since s is positive, the game ends with probability 1 after a finite number of steps, because, for any number t , the probability that it has not stopped after t steps is not more than (1 − s ) t . ::: ::: Payments accumulate throughout the course of play: the first player takes a i j k from the second whenever the pair i , j is chosen at position k. If we define the bound M: M = max k , i , j | a i j k | , then we see that the expected total gain or loss is bounded by M + ( 1 − s ) M + ( 1 − s ) 2 M + … = M / s . (1) ::: ::: The process therefore depends on N 2 + N matrices P K l = ( p i j k l | i = 1 , 2 , … , m K ; j = 1 , 2 , … , n K ) A K = ( a i j k | …
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paper_title: Markov Perfect Equilibrium: I. Observable Actions

paper_content:

Abstract We define Markov strategy and Markov perfect equilibrium (MPE) for games with observable actions. Informally, a Markov strategy depends only on payoff-relevant past events. More precisely, it is measurable with respect to the coarsest partition of histories for which, if all other players use measurable strategies, each player's decision-problem is also measurable. For many games, this definition is equivalent to a simple affine invariance condition. We also show that an MPE is generically robust: if payoffs of a generic game are perturbed, there exists an almost Markovian equilibrium in the perturbed game near the initial MPE. Journal of Economic Literature Classification Numbers: C72, C73.
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paper_title: Zero-determinant strategy for the algorithm optimize of blockchain PoW consensus

paper_content:

The Proof of Work (PoW) consensus algorithm guarantees the safety and dependability of Blockchain systems. Miners can achieve a consensus through the PoW algorithm during the mining process, that is mutual attacking. However, when the miners attack each other, all miners earn less. In this paper, we established a model that mining between two miners is an iterative game, and proposed a subclass of ZD strategy (a pining strategy) to alleviate miners' dilemma, a miner can control another miner's payoff and increase the social revenue through a pinning strategy. Numerical simulation results verify the effectiveness of the proposed strategy. In summary, this work leads to the better understanding and analysis of the PoW algorithm via the game theory, rendering it possible to design a more rational consensus algorithm in the future.
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paper_title: Analysis of Bitcoin Pooled Mining Reward Systems

paper_content:

In this paper we describe the various scoring systems used to calculate rewards of participants in Bitcoin pooled mining, explain the problems each were designed to solve and analyze their respective advantages and disadvantages.
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paper_title: Information propagation in the Bitcoin network

paper_content:

Bitcoin is a digital currency that unlike traditional currencies does not rely on a centralized authority. Instead Bitcoin relies on a network of volunteers that collectively implement a replicated ledger and verify transactions. In this paper we analyze how Bitcoin uses a multi-hop broadcast to propagate transactions and blocks through the network to update the ledger replicas. We then use the gathered information to verify the conjecture that the propagation delay in the network is the primary cause for blockchain forks. Blockchain forks should be avoided as they are symptomatic for inconsistencies among the replicas in the network. We then show what can be achieved by pushing the current protocol to its limit with unilateral changes to the client's behavior.
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paper_title: On the Instability of Bitcoin Without the Block Reward

paper_content:

Bitcoin provides two incentives for miners: block rewards and transaction fees. The former accounts for the vast majority of miner revenues at the beginning of the system, but it is expected to transition to the latter as the block rewards dwindle. There has been an implicit belief that whether miners are paid by block rewards or transaction fees does not affect the security of the block chain. We show that this is not the case. Our key insight is that with only transaction fees, the variance of the block reward is very high due to the exponentially distributed block arrival time, and it becomes attractive to fork a "wealthy" block to "steal" the rewards therein. We show that this results in an equilibrium with undesirable properties for Bitcoin's security and performance, and even non-equilibria in some circumstances. We also revisit selfish mining and show that it can be made profitable for a miner with an arbitrarily low hash power share, and who is arbitrarily poorly connected within the network. Our results are derived from theoretical analysis and confirmed by a new Bitcoin mining simulator that may be of independent interest. We discuss the troubling implications of our results for Bitcoin's future security and draw lessons for the design of new cryptocurrencies.
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paper_title: Zero-Determinant Strategy for Resource Sharing in Wireless Cooperations

paper_content:

Cooperation in resource sharing among wireless users and network operators has been widely studied in wireless communication. However, because of the limited coordination capability or cheating strategies, each participant of the cooperation may cease its cooperative behavior or duties unilaterally during the resource sharing, resulting in unsatisfying quality of services (QoSs) for all other participants. In this paper, we model the resource sharing among participants as an iterated game. Specifically, we first define the participant who is responsible for maintaining the social welfare as an administrator of cooperation (AoC), and other selfish participants as the regular participants of cooperation (PoCs). Then we consider three scenarios, i.e., with two-player applying discrete strategy, two-player applying continuous strategy, and multi-player applying continuous strategy, Finally, we investigate the power control problem in each of scenarios, and apply the zero-determinant strategies for the AoC to find the maximum social welfare that the AoC can achieve with existence of PoCs. Simulation results show that the high and stable social welfare can be maintained by the the AoC with the proposed zero-determinant algorithm.
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paper_title: On Bitcoin and red balloons

paper_content:

Many large decentralized systems rely on information propagation to ensure their proper function. We examine a common scenario in which only participants that are aware of the information can compete for some reward, and thus informed participants have an incentive not to propagate information to others. One recent example in which such tension arises is the 2009 DARPA Network Challenge (finding red balloons). We focus on another prominent example: Bitcoin, a decentralized electronic currency system. ::: Bitcoin represents a radical new approach to monetary systems. It has been getting a large amount of public attention over the last year, both in policy discussions and in the popular press. Its cryptographic fundamentals have largely held up even as its usage has become increasingly widespread. We find, however, that it exhibits a fundamental problem of a different nature, based on how its incentives are structured. We propose a modification to the protocol that can eliminate this problem. ::: Bitcoin relies on a peer-to-peer network to track transactions that are performed with the currency. For this purpose, every transaction a node learns about should be transmitted to its neighbors in the network. The current implemented protocol provides an incentive to nodes to not broadcast transactions they are aware of. Our solution is to augment the protocol with a scheme that rewards information propagation. Since clones are easy to create in the Bitcoin system, an important feature of our scheme is Sybil-proofness. ::: We show that our proposed scheme succeeds in setting the correct incentives, that it is Sybil-proof, and that it requires only a small payment overhead, all this is achieved with iterated elimination of dominated strategies. We complement this result by showing that there are no reward schemes in which information propagation and no self-cloning is a dominant strategy.
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paper_title: Zero-determinant Strategies for Multi-player Multi-action Iterated Games

paper_content:

Zero-determinant (ZD) strategies that allow a player to unilaterally control the linear combinations of its own and other players’ expected rewards in iterated games have recently found wide applications. However, existing ZD strategies mainly focus on some specific scenarios with restrictions on the number of players or actions a player can take. Targeting wider applications and better performance, the ZD strategies along with corresponding existence conditions for general multi-player multi-action iterated games are developed in this work, including existing ones as special cases. In addition, an interesting fact that every player can have at most one master player (that can control the expected reward of the given player) is revealed.
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paper_title: The Economics of Bitcoin Mining, or Bitcoin in the Presence of Adversaries

paper_content:

The Bitcoin digital currency depends for its correctness and stability on a combination of cryptography, distributed algorithms, and incentivedriven behavior. We examine Bitcoin as a consensus game and determine that it relies on separate consensus about the rules and about game state. An important aspect of Bitcoin’s design is the mining mechanism, in which participants expend resources on solving computational puzzles in order to collect rewards. This mechanism purportedly protects Bitcoin against certain technical problems such as inconsistencies in the system’s distributed log data structure. We consider the economics of Bitcoin mining, and whether the Bitcoin protocol can survive attacks, assuming that participants behave according to their incentives. We show that there is a Nash equilibrium in which all players behave consistently with Bitcoin’s reference implementation, along with innitely many equilibria in which they behave otherwise. We also show how a motivated adversary might be able to disrupt the Bitcoin system and \crash" the currency. Finally, we argue that Bitcoin will require the emergence of governance structures, contrary to the commonly held view in the Bitcoin community that the currency is ungovernable.
---
paper_title: Stochastic Games.

paper_content:

In a stochastic game the play proceeds by steps from position to position, according to transition probabilities controlled jointly by the two players. We shall assume a finite number, N , of positions, and finite numbers m K , n K of choices at each position; nevertheless, the game may not be bounded in length. If, when at position k , the players choose their i th and j th alternatives, respectively, then with probability s i j k > 0 the game stops, while with probability p i j k l the game moves to position l . Define s = min k , i , j s i j k . Since s is positive, the game ends with probability 1 after a finite number of steps, because, for any number t , the probability that it has not stopped after t steps is not more than (1 − s ) t . ::: ::: Payments accumulate throughout the course of play: the first player takes a i j k from the second whenever the pair i , j is chosen at position k. If we define the bound M: M = max k , i , j | a i j k | , then we see that the expected total gain or loss is bounded by M + ( 1 − s ) M + ( 1 − s ) 2 M + … = M / s . (1) ::: ::: The process therefore depends on N 2 + N matrices P K l = ( p i j k l | i = 1 , 2 , … , m K ; j = 1 , 2 , … , n K ) A K = ( a i j k | …
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paper_title: The splitting game and applications

paper_content:

First we define the splitting operator, which is related to the Shapley operator of the splitting game introduced by Sorin (2002). It depends on two compact convex sets C and D and associates to a function defined on C ×D a saddle function, extending the usual convexification or concavification operators. We first prove general properties on its domain and its range. Then we give conditions on C and D allowing to preserve continuity or Lipschitz properties, extending the results in Laraki (2001a) obtained for the convexification operator. These results are finally used, through the analysis of the asymptotic behavior of the splitting game, to prove the existence of a continuous solution for the Mertens-Zamir system of functional equations (Mertens and Zamir (1971-72) and (1977)) in a quite general framework.
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paper_title: Optimal Selfish Mining Strategies in Bitcoin

paper_content:

The Bitcoin protocol requires nodes to quickly distribute newly created blocks. Strong nodes can, however, gain higher payoffs by withholding blocks they create and selectively postponing their publication. The existence of such selfish mining attacks was first reported by Eyal and Sirer, who have demonstrated a specific deviation from the standard protocol (a strategy that we name SM1).
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paper_title: On Subversive Miner Strategies and Block Withholding Attack in Bitcoin Digital Currency

paper_content:

Bitcoin is a "crypto currency", a decentralized electronic payment scheme based on cryptography. Bitcoin economy grows at an incredibly fast rate and is now worth some 10 billions of dollars. Bitcoin mining is an activity which consists of creating (minting) the new coins which are later put into circulation. Miners spend electricity on solving cryptographic puzzles and they are also gatekeepers which validate bitcoin transactions of other people. Miners are expected to be honest and have some incentives to behave well. However. In this paper we look at the miner strategies with particular attention paid to subversive and dishonest strategies or those which could put bitcoin and its reputation in danger. We study in details several recent attacks in which dishonest miners obtain a higher reward than their relative contribution to the network. In particular we revisit the concept of block withholding attacks and propose a new concrete and practical block withholding attack which we show to maximize the advantage gained by rogue miners. ::: RECENT EVENTS: it seems that the attack was recently executed, see Section XI-A.
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paper_title: Majority is not enough: bitcoin mining is vulnerable

paper_content:

The Bitcoin cryptocurrency records its transactions in a public log called the blockchain. Its security rests critically on the distributed protocol that maintains the blockchain, run by participants called miners. Conventional wisdom asserts that the mining protocol is incentive-compatible and secure against colluding minority groups, that is, it incentivizes miners to follow the protocol as prescribed. ::: ::: We show that the Bitcoin mining protocol is not incentive-compatible. We present an attack with which colluding miners' revenue is larger than their fair share. The attack can have significant consequences for Bitcoin: Rational miners will prefer to join the attackers, and the colluding group will increase in size until it becomes a majority. At this point, the Bitcoin system ceases to be a decentralized currency. ::: ::: Unless certain assumptions are made, selfish mining may be feasible for any coalition size of colluding miners. We propose a practical modification to the Bitcoin protocol that protects Bitcoin in the general case. It prohibits selfish mining by a coalition that command less than 1/4 of the resources. This threshold is lower than the wrongly assumed 1/2 bound, but better than the current reality where a coalition of any size can compromise the system.
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paper_title: Incentive Compatibility of Pay Per Last N Shares in Bitcoin Mining Pools

paper_content:

Pay per last N shares (PPLNS) is a popular pool mining reward mechanism on a number of cryptocurrencies, including Bitcoin. In PPLNS pools, miners may stand to benefit by delaying reports of found shares. This attack may entail unfair or inefficient outcomes. We propose a simple but general game theoretical model of delays in PPLNS. We derive conditions for incentive compatible rewards, showing that the power of the most powerful miner determines whether incentives are compatible or not. An efficient algorithm to find Nash equilibria is put forward, and used to show how fairness and efficiency deteriorate with inside-pool inequality. In pools where all players have comparable computational power incentives to deviate from protocol are minor, but gains may be considerable in pools where miner’s resources are unequal. We explore how our findings can be applied to ameliorate delay attacks by fitting real-world parameters to our model.
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paper_title: Ergodic Mean-Payoff Games for the Analysis of Attacks in Crypto-Currencies

paper_content:

Crypto-currencies are digital assets designed to work as a medium of exchange, e.g., Bitcoin, but they are susceptible to attacks (dishonest behavior of participants). A framework for the analysis of attacks in crypto-currencies requires (a) modeling of game-theoretic aspects to analyze incentives for deviation from honest behavior; (b) concurrent interactions between participants; and (c) analysis of long-term monetary gains. Traditional game-theoretic approaches for the analysis of security protocols consider either qualitative temporal properties such as safety and termination, or the very special class of one-shot (stateless) games. However, to analyze general attacks on protocols for crypto-currencies, both stateful analysis and quantitative objectives are necessary. In this work our main contributions are as follows: (a) we show how a class of concurrent mean-payoff games, namely ergodic games, can model various attacks that arise naturally in crypto-currencies; (b) we present the first practical implementation of algorithms for ergodic games that scales to model realistic problems for crypto-currencies; and (c) we present experimental results showing that our framework can handle games with thousands of states and millions of transitions.
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paper_title: Trends, Tips, Tolls: A Longitudinal Study of Bitcoin Transaction Fees

paper_content:

The Bitcoin protocol supports optional direct payments from transaction partners to miners. These “fees” are supposed to substitute miners’ minting rewards in the long run. Acknowledging their role for the stability of the system, the right level of transaction fees is a hot topic of normative debates. This paper contributes empirical evidence from a historical analysis of agents’ revealed behavior concerning their payment of transaction fees. We identify several regime shifts, which can be largely explained by changes in the default client software or actions of big intermediaries in the ecosystem. Overall, it seems that rules dominate ratio, a state that is sustainable only if fees remain negligible.
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paper_title: Zero-determinant strategy for the algorithm optimize of blockchain PoW consensus

paper_content:

The Proof of Work (PoW) consensus algorithm guarantees the safety and dependability of Blockchain systems. Miners can achieve a consensus through the PoW algorithm during the mining process, that is mutual attacking. However, when the miners attack each other, all miners earn less. In this paper, we established a model that mining between two miners is an iterative game, and proposed a subclass of ZD strategy (a pining strategy) to alleviate miners' dilemma, a miner can control another miner's payoff and increase the social revenue through a pinning strategy. Numerical simulation results verify the effectiveness of the proposed strategy. In summary, this work leads to the better understanding and analysis of the PoW algorithm via the game theory, rendering it possible to design a more rational consensus algorithm in the future.
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paper_title: On Power Splitting Games in Distributed Computation: The Case of Bitcoin Pooled Mining

paper_content:

Several new services incentivize clients to compete in solving large computation tasks in exchange for financial rewards. This model of competitive distributed computation enables every user connected to the Internet to participate in a game in which he splits his computational power among a set of competing pools -- the game is called a computational power splitting game. We formally model this game and show its utility in analyzing the security of pool protocols that dictate how financial rewards are shared among the members of a pool. As a case study, we analyze the Bitcoin crypto currency which attracts computing power roughly equivalent to billions of desktop machines, over 70% of which is organized into public pools. We show that existing pool reward sharing protocols are insecure in our game-theoretic analysis under an attack strategy called the "block withholding attack". This attack is a topic of debate, initially thought to be ill-incentivized in today's pool protocols: i.e., causing a net loss to the attacker, and later argued to be always profitable. Our analysis shows that the attack is always well-incentivized in the long-run, but may not be so for a short duration. This implies that existing pool protocols are insecure, and if the attack is conducted systematically, Bitcoin pools could lose millions of dollars worth in months. The equilibrium state is a mixed strategy -- that is -- in equilibrium all clients are incentivized to probabilistically attack to maximize their payoffs rather than participate honestly. As a result, the Bitcoin network is incentivized to waste a part of its resources simply to compete.
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paper_title: Incentive Compatibility of Pay Per Last N Shares in Bitcoin Mining Pools

paper_content:

Pay per last N shares (PPLNS) is a popular pool mining reward mechanism on a number of cryptocurrencies, including Bitcoin. In PPLNS pools, miners may stand to benefit by delaying reports of found shares. This attack may entail unfair or inefficient outcomes. We propose a simple but general game theoretical model of delays in PPLNS. We derive conditions for incentive compatible rewards, showing that the power of the most powerful miner determines whether incentives are compatible or not. An efficient algorithm to find Nash equilibria is put forward, and used to show how fairness and efficiency deteriorate with inside-pool inequality. In pools where all players have comparable computational power incentives to deviate from protocol are minor, but gains may be considerable in pools where miner’s resources are unequal. We explore how our findings can be applied to ameliorate delay attacks by fitting real-world parameters to our model.
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paper_title: PPCoin: Peer-to-Peer Crypto-Currency with Proof-of-Stake

paper_content:

A peer-to-peer crypto-currency design derived from Satoshi Nakamoto’s Bitcoin. Proof-of-stake replaces proof-of-work to provide most of the network security. Under this hybrid design proof-of-work mainly provides initial minting and is largely non-essential in the long run. Security level of the network is not dependent on energy consumption in the long term thus providing an energyefficient and more cost-competitive peer-to-peer crypto-currency. Proof-of-stake is based on coin age and generated by each node via a hashing scheme bearing similarity to Bitcoin’s but over limited search space. Block chain history and transaction settlement are further protected by a centrally broadcasted checkpoint mechanism.
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paper_title: Smart Contracts for Bribing Miners

paper_content:

We present three smart contracts that allow a briber to fairly exchange bribes to miners who pursue a mining strategy benefiting the briber. The first contract, CensorshipCon, highlights that Ethereum’s uncle block reward policy can directly subsidise the cost of bribing miners. The second contract, HistoryRevisionCon, rewards miners via an in-band payment for reversing transactions or enforcing a new state of another contract. The third contract, GoldfingerCon, rewards miners in one cryptocurrency for reducing the utility of another cryptocurrency. This work is motivated by the need to understand the extent to which smart contracts can impact the incentive mechanisms involved in Nakamoto-style consensus protocols.
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paper_title: It Will Cost You Nothing to 'Kill' a Proof-of-Stake Crypto-Currency

paper_content:

It is a widely spread belief that crypto-currencies implementing a proof of stake transaction validation system are less vulnerable to a 51% attack than crypto-currencies implementing a proof of work transaction validation system. In this article, we show that it is not the case and that, in fact, if the attacker’s motivation is large enough (and this is common knowledge), he will succeed in his attack at no cost.
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paper_title: Blockchain Mining Games

paper_content:

We study the strategic considerations of miners participating in the bitcoin's protocol. We formulate and study the stochastic game that underlies these strategic considerations. The miners collectively build a tree of blocks, and they are paid when they create a node (mine a block) which will end up in the path of the tree that is adopted by all. Since the miners can hide newly mined nodes, they play a game with incomplete information. Here we consider two simplified forms of this game in which the miners have complete information. In the simplest game the miners release every mined block immediately, but are strategic on which blocks to mine. In the second more complicated game, when a block is mined it is announced immediately, but it may not be released so that other miners cannot continue mining from it. A miner not only decides which blocks to mine, but also when to release blocks to other miners. In both games, we show that when the computational power of each miner is relatively small, their best response matches the expected behavior of the bitcoin designer. However, when the computational power of a miner is large, he deviates from the expected behavior, and other Nash equilibria arise.
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paper_title: Theoretical Bitcoin Attacks with less than Half of the Computational Power (draft)

paper_content:

A widespread security claim of the Bitcoin system, presented in the original Bitcoin white-paper, states that the security of the system is guaranteed as long as there is no attacker in possession of half or more of the total computational power used to maintain the system. This claim, however, is proved based on theoretically flawed assumptions. ::: In the paper we analyze two kinds of attacks based on two theoretical flaws: the Block Discarding Attack and the Difficulty Raising Attack. We argue that the current theoretical limit of attacker's fraction of total computational power essential for the security of the system is in a sense not $\frac{1}{2}$ but a bit less than $\frac{1}{4}$, and outline proposals for protocol change that can raise this limit to be as close to $\frac{1}{2}$ as we want. ::: The basic idea of the Block Discarding Attack has been noted as early as 2010, and lately was independently though-of and analyzed by both author of this paper and authors of a most recently pre-print published paper. We thus focus on the major differences of our analysis, and try to explain the unfortunate surprising coincidence. To the best of our knowledge, the second attack is presented here for the first time.
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paper_title: Consortium Blockchain for Secure Energy Trading in Industrial Internet of Things

paper_content:

In industrial Internet of things (IIoT), peer-to-peer (P2P) energy trading ubiquitously takes place in various scenarios, e.g., microgrids, energy harvesting networks, and vehicle-to-grid networks. However, there are common security and privacy challenges caused by untrusted and nontransparent energy markets in these scenarios. To address the security challenges, we exploit the consortium blockchain technology to propose a secure energy trading system named energy blockchain. This energy blockchain can be widely used in general scenarios of P2P energy trading getting rid of a trusted intermediary. Besides, to reduce the transaction limitation resulted from transaction confirmation delays on the energy blockchain, we propose a credit-based payment scheme to support fast and frequent energy trading. An optimal pricing strategy using Stackelberg game for credit-based loans is also proposed. Security analysis and numerical results based on a real dataset illustrate that the proposed energy blockchain and credit-based payment scheme are secure and efficient in IIoT.
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paper_title: On The Longest Chain Rule and Programmed Self-Destruction of Crypto Currencies

paper_content:

In this paper we revisit some major orthodoxies which lie at the heart of the bitcoin crypto currency and its numerous clones. In particular we look at The Longest Chain Rule, the monetary supply policies and the exact mechanisms which implement them. We claim that these built-in properties are not as brilliant as they are sometimes claimed. A closer examination reveals that they are closer to being... engineering mistakes which other crypto currencies have copied rather blindly. More precisely we show that the capacity of current crypto currencies to resist double spending attacks is poor and most current crypto currencies are highly vulnerable. Satoshi did not implement a timestamp for bitcoin transactions and the bitcoin software does not attempt to monitor double spending events. As a result major attacks involving hundreds of millions of dollars can occur and would not even be recorded. Hundreds of millions have been invested to pay for ASIC hashing infrastructure yet insufficient attention was paid to network neutrality and to insure that the protection layer it promises is effective and cannot be abused. In this paper we develop a theory of Programmed Self-Destruction of crypto currencies. We observe that most crypto currencies have mandated abrupt and sudden transitions. These affect their hash rate and therefore their protection against double spending attacks which we do not limit the to the notion of 51% attacks which is highly misleading. In addition we show that smaller bitcoin competitors are substantially more vulnerable. In addition to small hash rate, many bitcoin competitors mandate incredibly important adjustments in miner reward. We exhibit examples of 'alt-coins' which validate our theory and for which the process of programmed decline and rapid self-destruction has clearly already started.
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paper_title: The Economics of Bitcoin Mining, or Bitcoin in the Presence of Adversaries

paper_content:

The Bitcoin digital currency depends for its correctness and stability on a combination of cryptography, distributed algorithms, and incentivedriven behavior. We examine Bitcoin as a consensus game and determine that it relies on separate consensus about the rules and about game state. An important aspect of Bitcoin’s design is the mining mechanism, in which participants expend resources on solving computational puzzles in order to collect rewards. This mechanism purportedly protects Bitcoin against certain technical problems such as inconsistencies in the system’s distributed log data structure. We consider the economics of Bitcoin mining, and whether the Bitcoin protocol can survive attacks, assuming that participants behave according to their incentives. We show that there is a Nash equilibrium in which all players behave consistently with Bitcoin’s reference implementation, along with innitely many equilibria in which they behave otherwise. We also show how a motivated adversary might be able to disrupt the Bitcoin system and \crash" the currency. Finally, we argue that Bitcoin will require the emergence of governance structures, contrary to the commonly held view in the Bitcoin community that the currency is ungovernable.
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paper_title: An Overview of Blockchain Technology: Architecture, Consensus, and Future Trends

paper_content:

Blockchain, the foundation of Bitcoin, has received extensive attentions recently. Blockchain serves as an immutable ledger which allows transactions take place in a decentralized manner. Blockchain-based applications are springing up, covering numerous fields including financial services, reputation system and Internet of Things (IoT), and so on. However, there are still many challenges of blockchain technology such as scalability and security problems waiting to be overcome. This paper presents a comprehensive overview on blockchain technology. We provide an overview of blockchain architechture firstly and compare some typical consensus algorithms used in different blockchains. Furthermore, technical challenges and recent advances are briefly listed. We also lay out possible future trends for blockchain.
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paper_title: Bitcoin a Distributed Shared Register

paper_content:

Distributed Ledgers (e.g. Bitcoin) occupy currently the first lines of the economical and political media and many speculations are done with respect to their level of coherence and their computability power. Interestingly, there is no consensus on the properties and abstractions that fully capture the behaviour of distributed ledgers. The interest in formalising the behaviour of distributed ledgers is twofold. Firstly, it helps to prove the correctness of the algorithms that implement existing distributed ledgers and explore their limits with respect to an unfriendly environment and target applications. Secondly, it facilitates the identification of the minimal building blocks necessary to implement the distributed ledger in a specific environment.
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paper_title: Optimal Selfish Mining Strategies in Bitcoin

paper_content:

The Bitcoin protocol requires nodes to quickly distribute newly created blocks. Strong nodes can, however, gain higher payoffs by withholding blocks they create and selectively postponing their publication. The existence of such selfish mining attacks was first reported by Eyal and Sirer, who have demonstrated a specific deviation from the standard protocol (a strategy that we name SM1).
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paper_title: Incentivizing Consensus Propagation in Proof-of-Stake Based Consortium Blockchain Networks

paper_content:

In proof-of-stake based consortium blockchain networks, pre-selected miners compete to solve a crypto-puzzle with a successfully mining probability proportional to the amount of their stakes. When the puzzle is solved, the miners are encouraged to take part in mined block propagation for verification to win a transaction fee from the blockchain user. The mined block should be propagated over wired or wireless networks, and be verified as quickly as possible to decrease consensus propagation delay. In this letter, we study incentivizing the consensus propagation considering the tradeoff between the network delay of block propagation process and offered transaction fee from the blockchain user. A Stackelberg game is then formulated to jointly maximize utility of the blockchain user and individual profit of the miners. The blockchain user acting as the leader sets the transaction fee for block verification. The miners acting as the followers decide on the number of recruited verifiers over wired or wireless networks. We apply the backward induction to analyze the existence and uniqueness of the Stackelberg equilibrium. Performance evaluation validates the feasibility and efficiency of the proposed game model in consensus propagation.
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paper_title: A Survey on the Security of Blockchain Systems

paper_content:

Since its inception, the blockchain technology has shown promising application prospects. From the initial cryptocurrency to the current smart contract, blockchain has been applied to many fields. Although there are some studies on the security and privacy issues of blockchain, there lacks a systematic examination on the security of blockchain systems. In this paper, we conduct a systematic study on the security threats to blockchain and survey the corresponding real attacks by examining popular blockchain systems. We also review the security enhancement solutions for blockchain, which could be used in the development of various blockchain systems, and suggest some future directions to stir research efforts into this area.
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paper_title: Ouroboros: A Provably Secure Proof-of-Stake Blockchain Protocol

paper_content:

We present “Ouroboros”, the first blockchain protocol based on proof of stake with rigorous security guarantees. We establish security properties for the protocol comparable to those achieved by the bitcoin blockchain protocol. As the protocol provides a “proof of stake” blockchain discipline, it offers qualitative efficiency advantages over blockchains based on proof of physical resources (e.g., proof of work). We also present a novel reward mechanism for incentivizing Proof of Stake protocols and we prove that, given this mechanism, honest behavior is an approximate Nash equilibrium, thus neutralizing attacks such as selfish mining.
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paper_title: Incentive Compatibility of Bitcoin Mining Pool Reward Functions

paper_content:

In this paper we introduce a game-theoretic model for reward functions in Bitcoin mining pools. Our model consists only of an unordered history of reported shares and gives participating miners the strategy choices of either reporting or delaying when they discover a share or full solution. We defined a precise condition for incentive compatibility to ensure miners strategy choices optimize the welfare of the pool as a whole. With this definition we show that proportional mining rewards are not incentive compatible in this model. We introduce and analyze a novel reward function which is incentive compatible in this model. Finally we show that the popular reward function pay-per-last-N-shares is also incentive compatible in a more general model.
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paper_title: Blockchain challenges and opportunities: a survey

paper_content:

Blockchain has numerous benefits such as decentralisation, persistency, anonymity and auditability. There is a wide spectrum of blockchain applications ranging from cryptocurrency, financial services, risk management, internet of things (IoT) to public and social services. Although a number of studies focus on using the blockchain technology in various application aspects, there is no comprehensive survey on the blockchain technology in both technological and application perspectives. To fill this gap, we conduct a comprehensive survey on the blockchain technology. In particular, this paper gives the blockchain taxonomy, introduces typical blockchain consensus algorithms, reviews blockchain applications and discusses technical challenges as well as recent advances in tackling the challenges. Moreover, this paper also points out the future directions in the blockchain technology.
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paper_title: Incentivizing Blockchain Miners to Avoid Dishonest Mining Strategies by a Reputation-Based Paradigm

paper_content:

The mining process in the Blockchain is very resource intensive, therefore, miners form coalitions to verify each block of transactions in return for a reward where only the first coalition that accomplishes the proof-of-work will be rewarded. This leads to intense competitions among miners and consequently dishonest mining strategies, such as block withholding attack, selfish mining, eclipse attack and stubborn mining, to name a few. As a result, it is necessary to regulate the mining process to make miners accountable for any dishonest mining behavior. We therefore propose a new reputation-based framework for the proof-of-work computation in the Blockchain in which miners not only are incentivized to conduct honest mining but also disincentivized to commit to any malicious activities against other mining pools. We first illustrate the architecture of our reputation-based paradigm, explain how the miners are rewarded or penalized in our model, and subsequently, we provide game theoretical analyses to show how this new framework encourages the miners to avoid dishonest mining strategies. In our setting, a mining game is repeatedly played among a set of pool managers and miners where the reputation of each miner or mining ally is continuously measured. At each round of the game, the pool managers send invitations only to a subset of miners based on a non-uniform probability distribution defined by the miners’ reputation values. We show that by using our proposed solution concept, honest mining becomes Nash Equilibrium in our setting. In other words, it will not be in the best interest of the miners to employ dishonest mining strategies even by gaining a short-term utility. This is due to the consideration of a long-term utility in our model and its impact on the miners’ utilities overtime.
---
paper_title: Empirical Analysis of Denial-of-Service Attacks in the Bitcoin Ecosystem

paper_content:

We present an empirical investigation into the prevalence and impact of distributed denial-of-service (DDoS) attacks on operators in the Bitcoin economy. To that end, we gather and analyze posts mentioning “DDoS” on the popular Bitcoin forum bitcointalk.org. Starting from around 3 000 different posts made between May 2011 and October 2013, we document 142 unique DDoS attacks on 40 Bitcoin services. We find that 7 % of all known operators have been attacked, but that currency exchanges, mining pools, gambling operators, eWallets, and financial services are much more likely to be attacked than other services. Not coincidentally, we find currency exchanges and mining pools are much more likely to have DDoS protection such as CloudFlare, Incapsula, or Amazon Cloud. We show that those services that have been attacked are more than three times as likely to buy anti-DDoS services than operators who have not been attacked. We find that big mining pools (those with historical hashrate shares of at least 5 %) are much more likely to be DDoSed than small pools. We investigate Mt. Gox as a case study for DDoS attacks on currency exchanges and find a disproportionate amount of DDoS reports made during the large spike in trading volume and exchange rates in spring 2013. We conclude by outlining future opportunities for researching DDoS attacks on Bitcoin.
---
paper_title: Game-Theoretic Analysis of DDoS Attacks Against Bitcoin Mining Pools

paper_content:

One of the unique features of the digital currency Bitcoin is that new cash is introduced by so-called miners carrying out resource-intensive proof-of-work operations. To increase their chances of obtaining freshly minted bitcoins, miners typically join pools to collaborate on the computations. However, intense competition among mining pools has recently manifested in two ways. Miners may invest in additional computing resources to increase the likelihood of winning the next mining race. But, at times, a more sinister tactic is also employed: a mining pool may trigger a costly distributed denial-of-service (DDoS) attack to lower the expected success outlook of a competing mining pool. We explore the trade-off between these strategies with a series of game-theoretical models of competition between two pools of varying sizes. We consider differences in costs of investment and attack, as well as uncertainty over whether a DDoS attack will succeed. By characterizing the game’s equilibria, we can draw a number of conclusions. In particular, we find that pools have a greater incentive to attack large pools than small ones. We also observe that larger mining pools have a greater incentive to attack than smaller ones.
---
paper_title: Game theoretic study on blockchain based secure edge networks

paper_content:

Blockchain has been applied to study data privacy and network security recently. In this paper, we propose a punishment scheme based on the action record on the blockchain to suppress the attack motivation of the edge servers and the mobile devices in the edge network. The interactions between a mobile device and an edge server are formulated as a blockchain security game, in which the mobile device sends a request to the server to obtain real-time service or launches attacks against the server for illegal security gains, and the server chooses to perform the request from the device or attack it. The Nash equilibria (NEs) of the game are derived and the conditions that each NE exists are provided to disclose how the punishment scheme impacts the adversary behaviors of the mobile device and the edge server.
---
paper_title: Blockchain beyond bitcoin

paper_content:

Blockchain technology has the potential to revolutionize applications and redefine the digital economy.
---
paper_title: iShare: Blockchain-Based Privacy-Aware Multi-Agent Information Sharing Games for Cybersecurity

paper_content:

In this paper, we design, develop, and evaluate a novel information sharing (iShare) framework for cybersecurity with the goal of protecting confidential information and networked infrastructures from future cyber-attacks. The proposed iShare framework leverages the Blockchain concept used in Bitcoin systems where multiple organizations/agencies participate for information sharing (without violating their privacy) to secure and monitor their cyberspace. Note that the Bitcoin for financial transactions has already demonstrated that there is a trusted, auditable sharing with peer-to-peer communications accompanied by a public ledger. The main aim of the Blockchain-based iShare framework is to constantly collect high-resolution, cyber-attack information across organizational boundaries of which the organizations have no specific knowledge or control over any other organizations’ data or damage caused by cyber-attacks. In the proposed iShare framework, the decentralized nature of the Blockchain and digitally signed transactions ensure that an adversary cannot pose as a legitimate organization/user or cannot control/hamper the system because of the digital-signatures and cannot learn anything from the public ledger that has just hashed pointers. Moreover, we analyze the security attacks by outsiders (not participating in the iShare) using a Stackelberg game.
---
paper_title: On Cyber Risk Management of Blockchain Networks: A Game Theoretic Approach

paper_content:

Open-access blockchains based on proof-of-work protocols have gained tremendous popularity for their capabilities of providing decentralized tamper-proof ledgers and platforms for data-driven autonomous organization. Nevertheless, the proof-of-work based consensus protocols are vulnerable to cyber-attacks such as double-spending. In this paper, we propose a novel approach of cyber risk management for blockchain-based service. In particular, we adopt the cyber-insurance as an economic tool for neutralizing cyber risks due to attacks in blockchain networks. We consider a blockchain service market, which is composed of the infrastructure provider, the blockchain provider, the cyber-insurer, and the users. The blockchain provider purchases from the infrastructure provider, e.g., a cloud, the computing resources to maintain the blockchain consensus, and then offers blockchain services to the users. The blockchain provider strategizes its investment in the infrastructure and the service price charged to the users, in order to improve the security of the blockchain and thus optimize its profit. Meanwhile, the blockchain provider also purchases a cyber-insurance from the cyber-insurer to protect itself from the potential damage due to the attacks. In return, the cyber-insurer adjusts the insurance premium according to the perceived risk level of the blockchain service. Based on the assumption of rationality for the market entities, we model the interaction among the blockchain provider, the users, and the cyber-insurer as a two-level Stackelberg game. Namely, the blockchain provider and the cyber-insurer lead to set their pricing/investment strategies, and then the users follow to determine their demand of the blockchain service. Specifically, we consider the scenario of double-spending attacks and provide a series of analytical results about the Stackelberg equilibrium in the market game.
---
paper_title: Solving the Buyer and Seller’s Dilemma: A Dual-Deposit Escrow Smart Contract for Provably Cheat-Proof Delivery and Payment for a Digital Good without a Trusted Mediator

paper_content:

A fundamental problem for electronic commerce is the buying and selling of digital goods between individuals that may not know or trust each other. Traditionally, this problem has been addressed by the use of trusted third-parties such as credit-card companies, mediated escrows, legal adjudication, or reputation systems. Despite the rise of blockchain protocols as a way to send payments without trusted third parties, the important problem of exchanging a digital good for payment without trusted third parties has been paid much less attention. We refer to this problem as the Buyer and Seller’s Dilemma and present for it a dual-deposit escrow trade protocol which uses double-sided payment deposits in conjunction with simple cryptographic primitives, and that can be implemented using a blockchain-based smart contract. We analyze our protocol as an extensive-form game and prove that the Sub-game Perfect Nash Equilibrium for this game is for both the buyer and seller to cooperate and behave honestly. We address this problem under the assumption that the digital good being traded is known and verifiable, with a fixed price known to both parties.
---
paper_title: Astraea: A Decentralized Blockchain Oracle

paper_content:

The public blockchain was originally conceived to process monetary transactions in a peer-to-peer network while preventing double-spending. It has since been extended to numerous other applications including execution of programs that exist on the blockchain called "smart contracts." Smart contracts have a major limitation, namely they only operate on data that is on the blockchain. Trusted entities called oracles attest to external data in order to bring it onto the blockchain but they do so without the robust security guarantees that blockchains generally provide. This has the potential to turn oracles into centralized points-of-failure. To address this concern, this paper introduces Astraea, a decentralized oracle based on a voting game that decides the truth or falsity of propositions. Players fall into two roles: voters and certifiers. Voters play a low-risk/low-reward role that is resistant to adversarial manipulation while certifiers play a high-risk/high-reward role so they are required to play with a high degree of accuracy. This paper also presents a formal analysis of the parameters behind the system to measure the probability of an adversary with bounded funds being able to successfully manipulate the oracle's decision, that shows that the same parameters can be set to make manipulation arbitrarily difficult---a desirable feature for the system. Further, this analysis demonstrates that under those conditions a Nash equilibrium exists where all rational players are forced to behave honestly.
---
paper_title: Betrayal, Distrust, and Rationality: Smart Counter-Collusion Contracts for Verifiable Cloud Computing

paper_content:

Cloud computing has become an irreversible trend. Together comes the pressing need for verifiability, to assure the client the correctness of computation outsourced to the cloud. Existing verifiable computation techniques all have a high overhead, thus if being deployed in the clouds, would render cloud computing more expensive than the on-premises counterpart. To achieve verifiability at a reasonable cost, we leverage game theory and propose a smart contract based solution. In a nutshell, a client lets two clouds compute the same task, and uses smart contracts to stimulate tension, betrayal and distrust between the clouds, so that rational clouds will not collude and cheat. In the absence of collusion, verification of correctness can be done easily by crosschecking the results from the two clouds. We provide a formal analysis of the games induced by the contracts, and prove that the contracts will be effective under certain reasonable assumptions. By resorting to game theory and smart contracts, we are able to avoid heavy cryptographic protocols. The client only needs to pay two clouds to compute in the clear, and a small transaction fee to use the smart contracts. We also conducted a feasibility study that involves implementing the contracts in Solidity and running them on the official Ethereum network.
---
paper_title: Bitcoin and Beyond: A Technical Survey on Decentralized Digital Currencies

paper_content:

Besides attracting a billion dollar economy, Bitcoin revolutionized the field of digital currencies and influenced many adjacent areas. This also induced significant scientific interest. In this survey, we unroll and structure the manyfold results and research directions. We start by introducing the Bitcoin protocol and its building blocks. From there we continue to explore the design space by discussing existing contributions and results. In the process, we deduce the fundamental structures and insights at the core of the Bitcoin protocol and its applications. As we show and discuss, many key ideas are likewise applicable in various other fields, so that their impact reaches far beyond Bitcoin itself.
---
paper_title: Analysis of Bitcoin Pooled Mining Reward Systems

paper_content:

In this paper we describe the various scoring systems used to calculate rewards of participants in Bitcoin pooled mining, explain the problems each were designed to solve and analyze their respective advantages and disadvantages.
---
paper_title: CYBEX: the cybersecurity information exchange framework (x.1500)

paper_content:

The cybersecurity information exchange framework, known as CYBEX, is currently undergoing its first iteration of standardization efforts within ITU-T. The framework describes how cybersecurity information is exchanged between cybersecurity entities on a global scale and how the exchange is assured. The worldwide implementation of the framework will eventually minimize the disparate availability of cybersecurity information. This paper provides a specification overview, use cases, and the current status of CYBEX.
---
paper_title: iShare: Blockchain-Based Privacy-Aware Multi-Agent Information Sharing Games for Cybersecurity

paper_content:

In this paper, we design, develop, and evaluate a novel information sharing (iShare) framework for cybersecurity with the goal of protecting confidential information and networked infrastructures from future cyber-attacks. The proposed iShare framework leverages the Blockchain concept used in Bitcoin systems where multiple organizations/agencies participate for information sharing (without violating their privacy) to secure and monitor their cyberspace. Note that the Bitcoin for financial transactions has already demonstrated that there is a trusted, auditable sharing with peer-to-peer communications accompanied by a public ledger. The main aim of the Blockchain-based iShare framework is to constantly collect high-resolution, cyber-attack information across organizational boundaries of which the organizations have no specific knowledge or control over any other organizations’ data or damage caused by cyber-attacks. In the proposed iShare framework, the decentralized nature of the Blockchain and digitally signed transactions ensure that an adversary cannot pose as a legitimate organization/user or cannot control/hamper the system because of the digital-signatures and cannot learn anything from the public ledger that has just hashed pointers. Moreover, we analyze the security attacks by outsiders (not participating in the iShare) using a Stackelberg game.
---
paper_title: Astraea: A Decentralized Blockchain Oracle

paper_content:

The public blockchain was originally conceived to process monetary transactions in a peer-to-peer network while preventing double-spending. It has since been extended to numerous other applications including execution of programs that exist on the blockchain called "smart contracts." Smart contracts have a major limitation, namely they only operate on data that is on the blockchain. Trusted entities called oracles attest to external data in order to bring it onto the blockchain but they do so without the robust security guarantees that blockchains generally provide. This has the potential to turn oracles into centralized points-of-failure. To address this concern, this paper introduces Astraea, a decentralized oracle based on a voting game that decides the truth or falsity of propositions. Players fall into two roles: voters and certifiers. Voters play a low-risk/low-reward role that is resistant to adversarial manipulation while certifiers play a high-risk/high-reward role so they are required to play with a high degree of accuracy. This paper also presents a formal analysis of the parameters behind the system to measure the probability of an adversary with bounded funds being able to successfully manipulate the oracle's decision, that shows that the same parameters can be set to make manipulation arbitrarily difficult---a desirable feature for the system. Further, this analysis demonstrates that under those conditions a Nash equilibrium exists where all rational players are forced to behave honestly.
---
paper_title: Betrayal, Distrust, and Rationality: Smart Counter-Collusion Contracts for Verifiable Cloud Computing

paper_content:

Cloud computing has become an irreversible trend. Together comes the pressing need for verifiability, to assure the client the correctness of computation outsourced to the cloud. Existing verifiable computation techniques all have a high overhead, thus if being deployed in the clouds, would render cloud computing more expensive than the on-premises counterpart. To achieve verifiability at a reasonable cost, we leverage game theory and propose a smart contract based solution. In a nutshell, a client lets two clouds compute the same task, and uses smart contracts to stimulate tension, betrayal and distrust between the clouds, so that rational clouds will not collude and cheat. In the absence of collusion, verification of correctness can be done easily by crosschecking the results from the two clouds. We provide a formal analysis of the games induced by the contracts, and prove that the contracts will be effective under certain reasonable assumptions. By resorting to game theory and smart contracts, we are able to avoid heavy cryptographic protocols. The client only needs to pay two clouds to compute in the clear, and a small transaction fee to use the smart contracts. We also conducted a feasibility study that involves implementing the contracts in Solidity and running them on the official Ethereum network.
---
paper_title: Solving the Buyer and Seller’s Dilemma: A Dual-Deposit Escrow Smart Contract for Provably Cheat-Proof Delivery and Payment for a Digital Good without a Trusted Mediator

paper_content:

A fundamental problem for electronic commerce is the buying and selling of digital goods between individuals that may not know or trust each other. Traditionally, this problem has been addressed by the use of trusted third-parties such as credit-card companies, mediated escrows, legal adjudication, or reputation systems. Despite the rise of blockchain protocols as a way to send payments without trusted third parties, the important problem of exchanging a digital good for payment without trusted third parties has been paid much less attention. We refer to this problem as the Buyer and Seller’s Dilemma and present for it a dual-deposit escrow trade protocol which uses double-sided payment deposits in conjunction with simple cryptographic primitives, and that can be implemented using a blockchain-based smart contract. We analyze our protocol as an extensive-form game and prove that the Sub-game Perfect Nash Equilibrium for this game is for both the buyer and seller to cooperate and behave honestly. We address this problem under the assumption that the digital good being traded is known and verifiable, with a fixed price known to both parties.
---
paper_title: iShare: Blockchain-Based Privacy-Aware Multi-Agent Information Sharing Games for Cybersecurity

paper_content:

In this paper, we design, develop, and evaluate a novel information sharing (iShare) framework for cybersecurity with the goal of protecting confidential information and networked infrastructures from future cyber-attacks. The proposed iShare framework leverages the Blockchain concept used in Bitcoin systems where multiple organizations/agencies participate for information sharing (without violating their privacy) to secure and monitor their cyberspace. Note that the Bitcoin for financial transactions has already demonstrated that there is a trusted, auditable sharing with peer-to-peer communications accompanied by a public ledger. The main aim of the Blockchain-based iShare framework is to constantly collect high-resolution, cyber-attack information across organizational boundaries of which the organizations have no specific knowledge or control over any other organizations’ data or damage caused by cyber-attacks. In the proposed iShare framework, the decentralized nature of the Blockchain and digitally signed transactions ensure that an adversary cannot pose as a legitimate organization/user or cannot control/hamper the system because of the digital-signatures and cannot learn anything from the public ledger that has just hashed pointers. Moreover, we analyze the security attacks by outsiders (not participating in the iShare) using a Stackelberg game.
---
paper_title: On Cyber Risk Management of Blockchain Networks: A Game Theoretic Approach

paper_content:

Open-access blockchains based on proof-of-work protocols have gained tremendous popularity for their capabilities of providing decentralized tamper-proof ledgers and platforms for data-driven autonomous organization. Nevertheless, the proof-of-work based consensus protocols are vulnerable to cyber-attacks such as double-spending. In this paper, we propose a novel approach of cyber risk management for blockchain-based service. In particular, we adopt the cyber-insurance as an economic tool for neutralizing cyber risks due to attacks in blockchain networks. We consider a blockchain service market, which is composed of the infrastructure provider, the blockchain provider, the cyber-insurer, and the users. The blockchain provider purchases from the infrastructure provider, e.g., a cloud, the computing resources to maintain the blockchain consensus, and then offers blockchain services to the users. The blockchain provider strategizes its investment in the infrastructure and the service price charged to the users, in order to improve the security of the blockchain and thus optimize its profit. Meanwhile, the blockchain provider also purchases a cyber-insurance from the cyber-insurer to protect itself from the potential damage due to the attacks. In return, the cyber-insurer adjusts the insurance premium according to the perceived risk level of the blockchain service. Based on the assumption of rationality for the market entities, we model the interaction among the blockchain provider, the users, and the cyber-insurer as a two-level Stackelberg game. Namely, the blockchain provider and the cyber-insurer lead to set their pricing/investment strategies, and then the users follow to determine their demand of the blockchain service. Specifically, we consider the scenario of double-spending attacks and provide a series of analytical results about the Stackelberg equilibrium in the market game.
---
paper_title: Solving the Buyer and Seller’s Dilemma: A Dual-Deposit Escrow Smart Contract for Provably Cheat-Proof Delivery and Payment for a Digital Good without a Trusted Mediator

paper_content:

A fundamental problem for electronic commerce is the buying and selling of digital goods between individuals that may not know or trust each other. Traditionally, this problem has been addressed by the use of trusted third-parties such as credit-card companies, mediated escrows, legal adjudication, or reputation systems. Despite the rise of blockchain protocols as a way to send payments without trusted third parties, the important problem of exchanging a digital good for payment without trusted third parties has been paid much less attention. We refer to this problem as the Buyer and Seller’s Dilemma and present for it a dual-deposit escrow trade protocol which uses double-sided payment deposits in conjunction with simple cryptographic primitives, and that can be implemented using a blockchain-based smart contract. We analyze our protocol as an extensive-form game and prove that the Sub-game Perfect Nash Equilibrium for this game is for both the buyer and seller to cooperate and behave honestly. We address this problem under the assumption that the digital good being traded is known and verifiable, with a fixed price known to both parties.
---
paper_title: Astraea: A Decentralized Blockchain Oracle

paper_content:

The public blockchain was originally conceived to process monetary transactions in a peer-to-peer network while preventing double-spending. It has since been extended to numerous other applications including execution of programs that exist on the blockchain called "smart contracts." Smart contracts have a major limitation, namely they only operate on data that is on the blockchain. Trusted entities called oracles attest to external data in order to bring it onto the blockchain but they do so without the robust security guarantees that blockchains generally provide. This has the potential to turn oracles into centralized points-of-failure. To address this concern, this paper introduces Astraea, a decentralized oracle based on a voting game that decides the truth or falsity of propositions. Players fall into two roles: voters and certifiers. Voters play a low-risk/low-reward role that is resistant to adversarial manipulation while certifiers play a high-risk/high-reward role so they are required to play with a high degree of accuracy. This paper also presents a formal analysis of the parameters behind the system to measure the probability of an adversary with bounded funds being able to successfully manipulate the oracle's decision, that shows that the same parameters can be set to make manipulation arbitrarily difficult---a desirable feature for the system. Further, this analysis demonstrates that under those conditions a Nash equilibrium exists where all rational players are forced to behave honestly.
---
paper_title: Betrayal, Distrust, and Rationality: Smart Counter-Collusion Contracts for Verifiable Cloud Computing

paper_content:

Cloud computing has become an irreversible trend. Together comes the pressing need for verifiability, to assure the client the correctness of computation outsourced to the cloud. Existing verifiable computation techniques all have a high overhead, thus if being deployed in the clouds, would render cloud computing more expensive than the on-premises counterpart. To achieve verifiability at a reasonable cost, we leverage game theory and propose a smart contract based solution. In a nutshell, a client lets two clouds compute the same task, and uses smart contracts to stimulate tension, betrayal and distrust between the clouds, so that rational clouds will not collude and cheat. In the absence of collusion, verification of correctness can be done easily by crosschecking the results from the two clouds. We provide a formal analysis of the games induced by the contracts, and prove that the contracts will be effective under certain reasonable assumptions. By resorting to game theory and smart contracts, we are able to avoid heavy cryptographic protocols. The client only needs to pay two clouds to compute in the clear, and a small transaction fee to use the smart contracts. We also conducted a feasibility study that involves implementing the contracts in Solidity and running them on the official Ethereum network.
---
paper_title: Will cyber-insurance improve network security? A market analysis

paper_content:

Recent work in security has illustrated that solutions aimed at detection and elimination of security threats alone are unlikely to result in a robust cyberspace. As an orthogonal approach to mitigating security problems, some have pursued the use of cyber-insurance as a suitable risk management technique. Such an approach has the potential to jointly align with the incentives of security vendors (e.g., Symantec, Microsoft, etc.), cyber-insurers (e.g., ISPs, cloud providers, security vendors, etc.), regulatory agencies (e.g., government), and network users (individuals and organizations), in turn paving the way for comprehensive and robust cyber-security mechanisms. To this end, in this work, we are motivated by the following important question: can cyber-insurance really improve the security in a network? To address this question, we adopt a market-based approach. Specifically, we analyze regulated monopolistic and competitive cyber-insurance markets, where the market elements consist of risk-averse cyber-insurers, risk-averse network users, a regulatory agency, and security vendors. Our results show that (i) without contract discrimination amongst users, there always exists a unique market equilibrium for both market types, but the equilibrium is inefficient and does not improve network security, and (ii) in monopoly markets, contract discrimination amongst users results in a unique market equilibrium that is efficient, which in turn results in network security improvement however, the cyber-insurer can make zero expected profits. The latter fact is often sufficient to de-incentivize the insurer to be a part of a market, and will eventually lead to its collapse. This fact also emphasizes the need for designing mechanisms that incentivize the insurer to permanently be part of the market.
---
paper_title: The Gap Game

paper_content:

Blockchain-based cryptocurrencies secure a decentralized consensus protocol by incentives. The protocol participants, called miners, generate (mine) a series of blocks, each containing monetary transactions created by system users. As incentive for participation, miners receive newly minted currency and transaction fees paid by transaction creators. Blockchain bandwidth limits lead users to pay increasing fees in order to prioritize their transactions. However, most prior work focused on models where fees are negligible. In a notable exception, Carlsten et al. [17] postulated that if incentives come only from fees then a mining gap would form~--- miners would avoid mining when the available fees are insufficient. In this work, we analyze cryptocurrency security in realistic settings, taking into account all elements of expenses and rewards. To study when gaps form, we analyze the system as a game we call the gap game. We analyze the game with a combination of symbolic and numeric analysis tools in a wide range of scenarios. Our analysis confirms Carlsten et al.'s postulate; indeed, we show that gaps form well before fees are the only incentive, and analyze the implications on security. Perhaps surprisingly, we show that different miners choose different gap sizes to optimize their utility, even when their operating costs are identical. Alarmingly, we see that the system incentivizes large miner coalitions, reducing system decentralization. We describe the required conditions to avoid the incentive misalignment, providing guidelines for future cryptocurrency design.
---
paper_title: The Ripple Protocol Consensus Algorithm

paper_content:

While several consensus algorithms exist for the Byzantine Generals Problem, specifically as it pertains to distributed payment systems, many suffer from high latency induced by the requirement that all nodes within the network communicate synchronously. In this work, we present a novel consensus algorithm that circumvents this requirement by utilizing collectively-trusted subnetworks within the larger network. We show that the “trust” required of these subnetworks is in fact minimal and can be further reduced with principled choice of the member nodes. In addition, we show that minimal connectivity is required to maintain agreement throughout the whole network. The result is a low-latency consensus algorithm which still maintains robustness in the face of Byzantine failures. We present this algorithm in its embodiment in the Ripple Protocol.
---
paper_title: Optimal Auction for Edge Computing Resource Management in Mobile Blockchain Networks: A Deep Learning Approach

paper_content:

Blockchain has recently been applied in many applications such as bitcoin, smart grid, and Internet of Things (IoT) as a public ledger of transactions. However, the use of blockchain in mobile environments is still limited because the mining process consumes too much computing and energy resources on mobile devices. Edge computing offered by the Edge Computing Service Provider can be adopted as a viable solution for offloading the mining tasks from the mobile devices, i.e., miners, in the mobile blockchain environment. However, a mechanism needs to be designed for edge resource allocation to maximize the revenue for the Edge Computing Service Provider and to ensure incentive compatibility and individual rationality is still open. In this paper, we develop an optimal auction based on deep learning for the edge resource allocation. Specifically, we construct a multi-layer neural network architecture based on an analytical solution of the optimal auction. The neural networks first perform monotone transformations of the miners' bids. Then, they calculate allocation and conditional payment rules for the miners. We use valuations of the miners as the data training to adjust parameters of the neural networks so as to optimize the loss function which is the expected, negated revenue of the Edge Computing Service Provider. We show the experimental results to confirm the benefits of using the deep learning for deriving the optimal auction for mobile blockchain with high revenue
---
paper_title: When Mobile Blockchain Meets Edge Computing

paper_content:

Blockchain, as the backbone technology of the current popular Bitcoin digital currency, has become a promising decentralized data management framework. Although blockchain has been widely adopted in many applications, e.g., finance, healthcare, and logistics, its application in mobile services is still limited. This is due to the fact that blockchain users need to solve preset proof-of-work puzzles to add new data, i.e., a block, to the blockchain. Solving the proof-of-work, however, consumes substantial resources in terms of CPU time and energy, which is not suitable for resource-limited mobile devices. To facilitate blockchain applications in future mobile Internet of Things systems, multiple access mobile edge computing appears to be an auspicious solution to solve the proof-of-work puzzles for mobile users. We first introduce a novel concept of edge computing for mobile blockchain. Then, we introduce an economic approach for edge computing resource management. Moreover, a prototype of mobile edge computing enabled blockchain systems is presented with experimental results to justify the proposed concept.
---
paper_title: Optimal Pricing-Based Edge Computing Resource Management in Mobile Blockchain

paper_content:

As the core issue of blockchain, the mining requires solving a proof-of-work puzzle, which is resource expensive to implement in mobile devices due to high computing power needed. Thus, the development of blockchain in mobile applications is restricted. In this paper, we consider the edge computing as the network enabler for mobile blockchain. In particular, we study optimal pricing-based edge computing resource management to support mobile blockchain applications where the mining process can be offloaded to an Edge computing Service Provider (ESP). We adopt a two-stage Stackelberg game to jointly maximize the profit of the ESP and the individual utilities of different miners. In Stage I, the ESP sets the price of edge computing services. In Stage II, 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 uniform and discriminatory pricing schemes. Further, the existence and uniqueness of Stackelberg game are validated for both pricing schemes. At last, the performance evaluation shows that the ESP intends to set the maximum possible value as the optimal price for profit maximization under uniform pricing. In addition, the discriminatory pricing helps the ESP encourage higher total service demand from miners and achieve greater profit correspondingly.
---
paper_title: Non-monotone submodular maximization under matroid and knapsack constraints

paper_content:

Submodular function maximization is a central problem in combinatorial optimization, generalizing many important problems including Max Cut in directed/undirected graphs and in hypergraphs, certain constraint satisfaction problems, maximum entropy sampling, and maximum facility location problems. Unlike submodular minimization, submodular maximization is NP-hard. In this paper, we give the first constant-factor approximation algorithm for maximizing any non-negative submodular function subject to multiple matroid or knapsack constraints. We emphasize that our results are for non-monotone submodular functions. In particular, for any constant k, we present a (1/k+2+1/k+ε)-approximation for the submodular maximization problem under k matroid constraints, and a (1/5-ε)-approximation algorithm for this problem subject to k knapsack constraints (ε>0 is any constant). We improve the approximation guarantee of our algorithm to 1/k+1+{1/k-1}+ε for k≥2 partition matroid constraints. This idea also gives a ({1/k+ε)-approximation for maximizing a monotone submodular function subject to k≥2 partition matroids, which improves over the previously best known guarantee of 1/k+1.
---
paper_title: Cournot Competition, Forward Markets and Efficiency

paper_content:

We build a model with two Cournot duopolists who produce at Time 0 wich is the date at which all demand is realized. N periods before time 0, the duopolists trade on a forward market for delivery at Time 0. Having made these contracts, they trade again at time ( − N + 1) for delivery at Time 0. etc. We show that, in equilibrium, each of them will sell forward which makes them worse off and makes consumers better off than if the forward market did not exist. When N, the number of forward trading periods prior to production, tends to infinity, the outcome tends to the competitive solution.
---
paper_title: Bitcoin Mining as a Contest

paper_content:

This paper presents a simple game theoretic framework, assuming complete information, to model Bitcoin mining activity. It does so by formalizing the activity as an all-pay contest: a competition where participants contend with each other to win a prize by investing in computational power, and victory is probabilistic. With at least two active miners, the unique pure strategy Nash equilibrium of the game suggests the following interesting insights on the motivation for being a miner: while the optimal amount of energy consumption depends also on the reward for solving the puzzle, as long as the reward is positive the decision to be an active miner depends only on the mining costs. Moreover, the intrinsic structure of the mining activity seems to prevent the formation of a monopoly, because in an equilibrium with two miners, both of them will have positive expected profits for any level of the opponent’s costs. A monopoly could only form if the rate of return on investment were higher outside bitcoin.
---
paper_title: Auction Mechanisms in Cloud/Fog Computing Resource Allocation for Public Blockchain Networks

paper_content:

As an emerging decentralized secure data management platform, blockchain has gained much popularity recently. To maintain a canonical state of blockchain data record, proof-of-work based consensus protocols provide the nodes, referred to as miners, in the network with incentives for confirming new block of transactions through a process of “block mining” by solving a cryptographic puzzle. Under the circumstance of limited local computing resources, e.g., mobile devices, it is natural for rational miners, i.e., consensus nodes, to offload computational tasks for proof of work to the cloud/fog computing servers. Therefore, we focus on the trading between the cloud/fog computing service provider and miners, and propose an auction-based market model for efficient computing resource allocation. In particular, we consider a proof-of-work based blockchain network, which is constrained by the computing resource and deployed as an infrastructure for decentralized data management applications. Due to the competition among miners in the blockchain network, the allocative externalities are particularly taken into account when designing the auction mechanisms. Specifically, we consider two bidding schemes: the constant-demand scheme where each miner bids for a fixed quantity of resources, and the multi-demand scheme where the miners can submit their preferable demands and bids. For the constant-demand bidding scheme, we propose an auction mechanism that achieves optimal social welfare. In the multi-demand bidding scheme, the social welfare maximization problem is NP-hard. Therefore, we design an approximate algorithm which guarantees the truthfulness, individual rationality and computational efficiency. Through extensive simulations, we show that our proposed auction mechanisms with the two bidding schemes can efficiently maximize the social welfare of the blockchain network and provide effective strategies for the cloud/fog computing service provider.
---
paper_title: Blockchain Without Waste: Proof-of-Stake

paper_content:

Permissionless blockchains require a protocol to generate consensus. Many prominent blockchains (e.g., Bitcoin and Ethereum) employ Proof-of-Work (PoW) for that purpose, but PoW possesses significant shortcomings. Various alternatives have been proposed. This paper provides the first formal economic model of the most famous alternative, Proof-of-Stake (PoS), and establishes conditions under which PoS generates consensus. A sufficiently modest reward schedule not only implies existence of an equilibrium in which consensus obtains as soon as possible but also precludes a persistent forking equilibrium. The latter result arises because PoS, unlike PoW, requires that validators hold stake.
---
paper_title: Solidus: An Incentive-compatible Cryptocurrency Based on Permissionless Byzantine Consensus

paper_content:

The decentralized cryptocurrency Bitcoin has experienced great success but also encountered many challenges. One of the challenges has been the long confirmation time and low transaction throughput. Another challenge is the lack of incentives at certain steps of the protocol, raising concerns for transaction withholding, selfish mining, etc. To address these challenges, we propose Solidus, a decentralized cryptocurrency based on permissionless Byzantine consensus. A core technique in Solidus is to use proof of work for leader election to adapt the Practical Byzantine Fault Tolerance (PBFT) protocol to a permissionless setting. We also design Solidus to be incentive compatible and to mitigate selfish mining. Solidus improves on Bitcoin in confirmation time and provides safety and liveness assuming Byzantine players and the largest coalition of rational players collectively control less than one-third of the computation power.
---
paper_title: The Bitcoin Mining Game

paper_content:

When processing transactions in a block, a miner increases his reward but also decreases his probability to earn any reward because the time needed for his block to reach consensus depends on its size. We show that this leads to a game situation between miners. We analytically solve this game for two miners. Then, we show that miners do not play a Nash equilibrium in the current Bitcoin mining environment, instead, they should not process any transaction. Finally, we show that the situation where no transaction is ever processed would stop being a Nash equilibrium if the transaction fee was multiplied or, equivalently, the fixed reward divided by a factor of about 12.
---
paper_title: Betting on Blockchain Consensus with Fantomette

paper_content:

Blockchain-based consensus protocols present the opportunity to develop new protocols, due to their novel requirements of open participation and explicit incentivization of participants. To address the first requirement, it is necessary to consider the leader election inherent in consensus protocols, which can be difficult to scale to a large and untrusted set of participants. To address the second, it is important to consider ways to provide incentivization without relying on the resource-intensive proofs-of-work used in Bitcoin. In this paper, we propose a secure leader election protocol, Caucus; we next fit this protocol into a broader blockchain-based consensus protocol, Fantomette, that provides game-theoretic guarantees in addition to traditional blockchain security properties. Fantomette is the first proof-of-stake protocol to give formal game-theoretic proofs of security in the presence of non-rational players.
---
paper_title: Delayed Blockchain Protocols

paper_content:

Given the parallels between game theory and consensus, it makes sense to intelligently design blockchain or DAG protocols with an incentive-compatible-first mentality. To that end, we propose a new blockchain or DAG protocol enhancement based on delayed rewards. We devise a new method for imposing slashing conditions on miner behavior, using their delayed rewards as stake in a Proof of Work system. Using fraud proofs, we can slash malicious miner behavior and reward long-lived, honest behavior.
---
paper_title: The blockchain folk theorem

paper_content:

Blockchains are distributed ledgers, operated within peer-to-peer networks. We model the proof-of-work blockchain protocol as a stochastic game and analyze the equilibrium strategies of rational, strategic miners. Mining the longest chain is a Markov perfect equilibrium, without forking, in line with Nakamoto (2008). The blockchain protocol, however, is a coordination game, with multiple equilibria. There exist equilibria with forks, leading to orphaned blocks and persistent divergence between chains. We also show how forks can be generated by information delays and software upgrades. Last we identify negative externalities implying that equilibrium investment in computing capacity is excessive
---
paper_title: The Bitcoin Mining Game: On the Optimality of Honesty in Proof-of-work Consensus Mechanism

paper_content:

We consider a game in which Bitcoin miners compete for a reward of each solved puzzle in a sequence of them. We model it as a sequential game with imperfect information, in which miners have to choose whether or not to report their success. We show that the game has a multiplicity of equilibria and we analyze the parameter constellations for each of them. In particular, the minimum requirement to find it optimal not to report is decreasing with the number of miners who are not reporting, and increasing the heterogeneity among players reduces the likelihood that they choose not to report.
---
paper_title: On the Necessity of a Prescribed Block Validity Consensus: Analyzing Bitcoin Unlimited Mining Protocol

paper_content:

Bitcoin has not only attracted many users but also been considered as a technical breakthrough by academia. However, the expanding potential of Bitcoin is largely untapped due to its limited throughput. The Bitcoin community is now facing its biggest crisis in history as the community splits on how to increase the throughput. Among various proposals, Bitcoin Unlimited recently became the most popular candidate, as it allows miners to collectively decide the block size limit according to the real network capacity. However, the security of BU is heatedly debated and no consensus has been reached as the issue is discussed in different miner incentive models. In this paper, we systematically evaluate BU's security with three incentive models via testing the two major arguments of BU supporters: the block validity consensus is not necessary for BU's security; such consensus would emerge in BU out of economic incentives. Our results invalidate both arguments and therefore disprove BU's security claims. Our paper further contributes to the field by addressing the necessity of a prescribed block validity consensus for cryptocurrencies.
---
paper_title: Ouroboros: A Provably Secure Proof-of-Stake Blockchain Protocol

paper_content:

We present “Ouroboros”, the first blockchain protocol based on proof of stake with rigorous security guarantees. We establish security properties for the protocol comparable to those achieved by the bitcoin blockchain protocol. As the protocol provides a “proof of stake” blockchain discipline, it offers qualitative efficiency advantages over blockchains based on proof of physical resources (e.g., proof of work). We also present a novel reward mechanism for incentivizing Proof of Stake protocols and we prove that, given this mechanism, honest behavior is an approximate Nash equilibrium, thus neutralizing attacks such as selfish mining.
---
paper_title: FruitChains: A Fair Blockchain

paper_content:

Nakamoto's famous blockchain protocol enables achieving consensus in a so-called permissionless setting---anyone can join (or leave) the protocol execution, and the protocol instructions do not depend on the identities of the players. His ingenious protocol prevents "sybil attacks" (where an adversary spawns any number of new players) by relying on computational puzzles (a.k.a. "moderately hard functions") introduced by Dwork and Naor (Crypto'92). Recent work by Garay et al (EuroCrypt'15) and Pass et al (manuscript, 2016) demonstrate that this protocol provably achieves consistency and liveness assuming a) honest players control a majority of the computational power in the network, b) the puzzle-hardness is appropriately set as a function of the maximum network delay and the total computational power of the network, and c) the computational puzzle is modeled as a random oracle. Assuming honest participation, however, is a strong assumption, especially in a setting where honest players are expected to perform a lot of work (to solve the computational puzzles). In Nakamoto's Bitcoin application of the blockchain protocol, players are incentivized to solve these puzzles by receiving rewards for every "block" (of transactions) they contribute to the blockchain. An elegant work by Eyal and Sirer (FinancialCrypt'14), strengthening and formalizing an earlier attack discussed on the Bitcoin forum, demonstrates that a coalition controlling even a minority fraction of the computational power in the network can gain (close to) 2 times its "fair share" of the rewards (and transaction fees) by deviating from the protocol instructions. In contrast, in a fair protocol, one would expect that players controlling a φ fraction of the computational resources to reap a φ fraction of the rewards. We present a new blockchain protocol---the FruitChain protocol---which satisfies the same consistency and liveness properties as Nakamoto's protocol (assuming an honest majority of the computing power), and additionally is δ-approximately fair: with overwhelming probability, any honest set of players controlling a φ fraction of computational power is guaranteed to get at least a fraction (1-δ)φ of the blocks (and thus rewards) in any Ω(κ/δ) length segment of the chain (where κ is the security parameter). Consequently, if this blockchain protocol is used as the ledger underlying a cryptocurrency system, where rewards and transaction fees are evenly distributed among the miners of blocks in a length κ segment of the chain, no coalition controlling less than a majority of the computing power can gain more than a factor (1+3δ) by deviating from the protocol (i.e., honest participation is an n/2-coalition-safe 3δ-Nash equilibrium). Finally, the FruitChain protocol enables decreasing the variance of mining rewards and as such significantly lessens (or even obliterates) the need for mining pools.
---
paper_title: Analysis of Bitcoin Pooled Mining Reward Systems

paper_content:

In this paper we describe the various scoring systems used to calculate rewards of participants in Bitcoin pooled mining, explain the problems each were designed to solve and analyze their respective advantages and disadvantages.
---
paper_title: Reward Sharing Schemes for Stake Pools

paper_content:

We introduce and study reward sharing schemes (RSS) that promote the fair formation of {\em stake pools} in collaborative projects that involve a large number of stakeholders such as the maintenance of a proof-of-stake (PoS) blockchain. Our mechanisms are parameterized by a target value for the desired number of pools. We show that by properly incentivizing participants, the desired number of stake pools is a Nash equilibrium arising from rational play. Our equilibria also exhibit an efficiency / security tradeoff via a parameter that calibrates between including pools with the smallest cost and providing protection against Sybil attacks, the setting where a single stakeholder creates a large number of pools in the hopes to dominate the collaborative project. We then describe how RSS can be deployed in the PoS setting, mitigating a number of potential deployment attacks and protocol deviations that include censoring transactions, performing Sybil attacks with the objective to control the majority of stake, lying about the actual cost and others. Finally, we experimentally demonstrate fast convergence to equilibria in dynamic environments where players react to each other's strategic moves over an indefinite period of interactive play. We also show how simple reward sharing schemes that are seemingly more"fair", perhaps counterintuitively, converge to centralized equilibria.
---
paper_title: Stable Games and their Dynamics

paper_content:

We study a class of population games called stable games. These games are characterized by self-defeating externalities: when agents revise their strategies, the improvements in the payoffs of strategies to which revising agents are switching are always exceeded by the improvements in the payoffs of strategies which revising agents are abandoning. We prove that the set of Nash equilibria of a stable game is globally asymptotically stable under a wide range of evolutionary dynamics. Convergence results for stable games are not as general as those for potential games: in addition to monotonicity of the dynamics, integrability of the agents' revision protocols plays a key role.
---
paper_title: Evolutionary Game Theory

paper_content:

This text introduces current evolutionary game theory--where ideas from evolutionary biology and rationalistic economics meet--emphasizing the links between static and dynamic approaches and noncooperative game theory. The author provides an overview of the developments that have taken place in this branch of game theory, discusses the mathematical tools needed to understand the area, describes both the motivation and intuition for the concepts involved, and explains why and how the theory is relevant to economics.
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paper_title: Bitcoin Mining Pools: A Cooperative Game Theoretic Analysis

paper_content:

Bitcoin is an innovative decentralized cryptocurrency whose core security relies on a "proof of work" procedure, which requires network participants to repeatedly compute hashes on inputs from a large search space. Finding one of the rare inputs that generates an extremely low hash value is considered a successful attempt, allowing miners to approve new transactions and, in return, to collect rewards in bitcoins. ::: ::: This reward allocation, which provides the incentive for miners to participate, is a random process with a large variance. Miners who desire a steady income thus often participate in mining pools that divide among their members the earned rewards, and reduce this variance. Mining pools are slightly better at coordinating participants due to lower-latency communication, a fact which implies that they manage to collect slightly higher rewards. ::: ::: We examine dynamics of pooled mining and the rewards that pools manage to collect, and use cooperative game theoretic tools to analyze how pool members may share these rewards. We show that for some network parameters, especially under high transaction loads, it is difficult or even impossible to distribute rewards in a stable way: some participants are always incentivized to switch between pools.
---
paper_title: Evolutionary game dynamics

paper_content:

Evolutionary game dynamics is the application of population dynamical methods to game theory. It has been introduced by evolutionary biologists, anticipated in part by classical game theorists. In this survey, we present an overview of the many brands of deterministic dynamical systems motivated by evolutionary game theory, including ordinary differential equations (and, in particular, the replicator equation), differential inclusions (the best response dynamics), difference equations (as, for instance, fictitious play) and reaction-diffusion systems. A recurrent theme (the so-called `folk theorem of evolutionary game theory') is the close connection of the dynamical approach with the Nash equilibrium, but we show that a static, equilibrium-based viewpoint is, on principle, unable to always account for the long-term behaviour of players adjusting their behaviour to maximise their payoff.
---
paper_title: Evolutionary Game for Mining Pool Selection in Blockchain Networks

paper_content:

In proof-of-work-based blockchain networks, the block miners participate in a crypto-puzzle solving competition to win the reward of publishing (i.e., mining) new blocks. Due to the remarkable difficulty of the crypto-puzzle, individual miners tend to join mining pools to secure stable profits. We study the dynamics of mining pool selection in a blockchain network, where mining pools may choose arbitrary block mining strategies. We identify the hash rate for puzzle-solving and the block propagation delay as two major factors determining the mining competition results. We then model the strategy evolution of individual miners as an evolutionary game. We provide the theoretical analysis of evolutionary stability in the pool selection dynamics for a two-pool case. Numerical simulations support our theoretical findings as well as demonstrate the stability in the evolution of miners’ strategies in a general case.
---
paper_title: Analysis of Bitcoin Pooled Mining Reward Systems

paper_content:

In this paper we describe the various scoring systems used to calculate rewards of participants in Bitcoin pooled mining, explain the problems each were designed to solve and analyze their respective advantages and disadvantages.
---
paper_title: Socially Optimal Mining Pools

paper_content:

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.
---
paper_title: Decentralized Mining in Centralized Pools

paper_content:

The rise of centralized mining pools for risk sharing does not necessarily undermine the decentralization required for permissionless blockchains: Each individual miner's cross-pool diversification and endogenous fees charged by pools generally sustain decentralization, because larger pools better internalize their externality on global hash rates, charge higher fees, attract disproportionately fewer miners, and thus grow more slowly. Instead, mining pools as a financial innovation escalate the arms race among competing miners and thus significantly increase the energy consumption of proof-of-work-based consensus mechanisms. Empirical evidence from Bitcoin mining supports our model predictions. The economic insights inform many other blockchain protocols as well as the industrial organization of mainstream sectors with similar characteristics but ambiguous prior findings.
---
paper_title: Incentive Compatibility of Bitcoin Mining Pool Reward Functions

paper_content:

In this paper we introduce a game-theoretic model for reward functions in Bitcoin mining pools. Our model consists only of an unordered history of reported shares and gives participating miners the strategy choices of either reporting or delaying when they discover a share or full solution. We defined a precise condition for incentive compatibility to ensure miners strategy choices optimize the welfare of the pool as a whole. With this definition we show that proportional mining rewards are not incentive compatible in this model. We introduce and analyze a novel reward function which is incentive compatible in this model. Finally we show that the popular reward function pay-per-last-N-shares is also incentive compatible in a more general model.
---
paper_title: Mixing Coins of Different Quality: A Game-Theoretic Approach

paper_content:

Cryptocoins based on public distributed ledgers can differ in their quality due to different subjective values users assign to coins depending on the unique transaction history of each coin. We apply game theory to study how qualitative differentiation between coins will affect the behavior of users interested in improving their anonymity through mixing services. We present two stylized models of mixing with perfect and imperfect information and analyze them for three distinct quality propagation policies: poison, haircut, and seniority. In the game of perfect information, mixing coins of high quality remains feasible under certain conditions, while imperfect information eventually leads to a mixing market where only coins of the lowest quality are mixed.
---
paper_title: Market Design with Blockchain Technology

paper_content:

Blockchain or, more generally, distributed ledger technology allows to create a decentralized digital ledger of transactions and to share it among a network of computers. In this paper, we argue that the implementation of this technology in financial markets offers investors new options for managing the degree of transparency of their holdings and their trading intentions. We first identify two intrinsic features of a distributed ledger that impact the availability of these new options, namely the mapping between identifiers and end-investors and the degree of transparency of the ledger, and we then examine how the implementation design of these critical features affects investor trading behavior, trading costs, and investor welfare, in a theoretical model of intermediated and peer-to-peer trading. We find that, despite the risk of front-running, the most transparent setting yields the highest investor welfare. In the absence of full transparency, for low levels of liquidity in the intermediated market, welfare is highest if investors are required to concentrate their holdings under single identifiers.
---
paper_title: Tokenomics: Dynamic Adoption and Valuation

paper_content:

We provide a dynamic asset-pricing model of (crypto-)tokens on (blockchain-based) platforms, and highlight their roles on endogenous user adoption. Tokens intermediate transactions on decentralized networks, and their trading creates an inter-temporal complementarity among users, generating a feedback loop between token valuation and platform adoption. Consequently, tokens capitalize future platform growth, accelerate adoption, and reduce user-base volatility. Equilibrium token price increases non-linearly in platform productivity, user heterogeneity, and endogenous network size. The model also produces explosive growth of user base after an initial period of dormant adoption, accompanied by a run-up of token price volatility. We further discuss how our framework can be used to discuss cryptocurrency supply, token competition, and pricing assets under network externality.
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paper_title: Mining competition in a multi-cryptocurrency ecosystem at the network edge: a congestion game approach

paper_content:

We model the competition over several blockchains characterizing multiple cryptocurrencies as a non-cooperative game. Then, we specialize our results to two instances of the general game, showing properties of the Nash equilibrium. In particular, leveraging results about congestion games, we establish the existence of pure Nash equilibria and provide efficient algorithms for finding such equilibria.
---
paper_title: Game of Coins

paper_content:

We formalize the current practice of strategic mining in multi-cryptocurrency markets as a game, and prove that any better-response learning in such games converges to equilibrium. We then offer a reward design scheme that moves the system configuration from any initial equilibrium to a desired one for any better-response learning of the miners. Our work introduces the first multi-coin strategic attack for adaptive and learning miners, as well as the study of reward design in a multi-agent system of learning agents.
---
paper_title: A blockchain-based smart grid: towards sustainable local energy markets

paper_content:

The increasing amount of renewable energy sources in the energy system calls for new market approaches to price and distribute the volatile and decentralized generation. Local energy markets, on which consumers and prosumers can trade locally produced renewable generation directly within their community, balance generation and consumption locally in a decentralized approach. We present a comprehensive concept, market design and simulation of a local energy market between 100 residential households. Our approach is based on a distributed information and communication technology, i.e. a private blockchain, which underlines the decentralized nature of local energy markets. Thus, we provide energy prosumers and consumers with a decentralized market platform for trading local energy generation without the need of a central intermediary. Furthermore, we present a preliminary economic evaluation of the market mechanism and a research agenda for the technological evaluation of blockchain technology as the local energy market’s main information and communication technology.
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paper_title: Energy Demand Side Management within micro-grid networks enhanced by blockchain

paper_content:

Abstract The management of energy supply and demand is becoming more challenging, especially in regions where the demand continues to grow rapidly and more intermittent renewable supply sources are added to the energy infrastructure. In this context, Demand Side Management (DSM) can be employed to align supply and demand and improve reliability of the system under supply constraints and stretch the capacity limits of the existing grid infrastructure. A game theoretic approach for a DSM model incorporating storage components is suggested in this paper especially for environments with energy supply constraints. The proposed model is able to not only reduce the Peak-to-Average ratio to benefit the electrical grid, but can also smoothen the dips in the load profile caused by supply constraints. In a case study to demonstrate the value of the model presented, a variety of residential demand types are evaluated within a micro-grid to maximize the payoff utility of both individual users and the whole system. Moreover, emerging blockchain technologies are introduced to guarantee the seamless and secure implementation of the proposed scheme, illustrating how a decentralized demand side management approach could be implemented in practice to facilitate peer-to-peer transactions following optimized demand profiles.
---
paper_title: Consortium Blockchain for Secure Energy Trading in Industrial Internet of Things

paper_content:

In industrial Internet of things (IIoT), peer-to-peer (P2P) energy trading ubiquitously takes place in various scenarios, e.g., microgrids, energy harvesting networks, and vehicle-to-grid networks. However, there are common security and privacy challenges caused by untrusted and nontransparent energy markets in these scenarios. To address the security challenges, we exploit the consortium blockchain technology to propose a secure energy trading system named energy blockchain. This energy blockchain can be widely used in general scenarios of P2P energy trading getting rid of a trusted intermediary. Besides, to reduce the transaction limitation resulted from transaction confirmation delays on the energy blockchain, we propose a credit-based payment scheme to support fast and frequent energy trading. An optimal pricing strategy using Stackelberg game for credit-based loans is also proposed. Security analysis and numerical results based on a real dataset illustrate that the proposed energy blockchain and credit-based payment scheme are secure and efficient in IIoT.
---
paper_title: Enabling Localized Peer-to-Peer Electricity Trading Among Plug-in Hybrid Electric Vehicles Using Consortium Blockchains

paper_content:

We propose a localized peer-to-peer (P2P) electricity trading model for locally buying and selling electricity among plug-in hybrid electric vehicles (PHEVs) in smart grids. Unlike traditional schemes, which transport electricity over long distances and through complex electricity transportation meshes, our proposed model achieves demand response by providing incentives to discharging PHEVs to balance local electricity demand out of their own self-interests. However, since transaction security and privacy protection issues present serious challenges, we explore a promising consortium blockchain technology to improve transaction security without reliance on a trusted third party. A localized P 2P E lectricity T rading system with CO nsortium blockchai N (PETCON) method is proposed to illustrate detailed operations of localized P2P electricity trading. Moreover, the electricity pricing and the amount of traded electricity among PHEVs are solved by an iterative double auction mechanism to maximize social welfare in this electricity trading. Security analysis shows that our proposed PETCON improves transaction security and privacy protection. Numerical results based on a real map of Texas indicate that the double auction mechanism can achieve social welfare maximization while protecting privacy of the PHEVs.
---
paper_title: Exchange of Renewable Energy among Prosumers using Blockchain with Dynamic Pricing

paper_content:

We consider users which may have renewable energy harvesting devices, or distributed generators. Such users can behave as consumer or producer (hence, we denote them as prosumers) at different time instances. A prosumer may sell the energy to other prosumers in exchange of money. We consider a demand response model, where the price of conventional energy depends on the total demand of all the prosumers at a certain time. A prosumer depending on its own utility has to select the amount of energy it wants to buy either from the grid or from other prosumers, or the amount of excess energy it wants to sell to other prosumers. However, the strategy, and the payoff of a prosumer inherently depends on the strategy of other prosumers as a prosumer can only buy if the other prosumers are willing to sell. We formulate the problem as a coupled constrained game, and seek to obtain the generalized Nash equilibrium. We show that the game is a concave potential game and show that there exists a unique generalized Nash equilibrium. We consider that a platform will set the price for distributed interchange of energy among the prosumers in order to minimize the consumption of the conventional energy. We propose a distributed algorithm where the platform sets a price to each prosumer, and then each prosumer at a certain time only optimizes its own payoff. The prosumer then updates the price depending on the supply and demand for each prosumer. We show that the algorithm converges to an optimal generalized Nash equilibrium. The distributed algorithm also provides an optimal price for the exchange market.
---
paper_title: Game of Coins

paper_content:

We formalize the current practice of strategic mining in multi-cryptocurrency markets as a game, and prove that any better-response learning in such games converges to equilibrium. We then offer a reward design scheme that moves the system configuration from any initial equilibrium to a desired one for any better-response learning of the miners. Our work introduces the first multi-coin strategic attack for adaptive and learning miners, as well as the study of reward design in a multi-agent system of learning agents.
---
paper_title: Mean field games

paper_content:

We survey here some recent studies concerning what we call mean-field models by analogy with Statistical Mechanics and Physics. More precisely, we present three examples of our mean-field approach to modelling in Economics and Finance (or other related subjects...). Roughly speaking, we are concerned with situations that involve a very large number of “rational players” with a limited information (or visibility) on the “game”. Each player chooses his optimal strategy in view of the global (or macroscopic) informations that are available to him and that result from the actions of all players. In the three examples we mention here, we derive a mean-field problem which consists in nonlinear differential equations. These equations are of a new type and our main goal here is to study them and establish their links with various fields of Analysis. We show in particular that these nonlinear problems are essentially well-posed problems i.e., have unique solutions. In addition, we give various limiting cases, examples and possible extensions. And we mention many open problems.
---
paper_title: The Bitcoin Mining Game

paper_content:

When processing transactions in a block, a miner increases his reward but also decreases his probability to earn any reward because the time needed for his block to reach consensus depends on its size. We show that this leads to a game situation between miners. We analytically solve this game for two miners. Then, we show that miners do not play a Nash equilibrium in the current Bitcoin mining environment, instead, they should not process any transaction. Finally, we show that the situation where no transaction is ever processed would stop being a Nash equilibrium if the transaction fee was multiplied or, equivalently, the fixed reward divided by a factor of about 12.
---
paper_title: On the Necessity of a Prescribed Block Validity Consensus: Analyzing Bitcoin Unlimited Mining Protocol

paper_content:

Bitcoin has not only attracted many users but also been considered as a technical breakthrough by academia. However, the expanding potential of Bitcoin is largely untapped due to its limited throughput. The Bitcoin community is now facing its biggest crisis in history as the community splits on how to increase the throughput. Among various proposals, Bitcoin Unlimited recently became the most popular candidate, as it allows miners to collectively decide the block size limit according to the real network capacity. However, the security of BU is heatedly debated and no consensus has been reached as the issue is discussed in different miner incentive models. In this paper, we systematically evaluate BU's security with three incentive models via testing the two major arguments of BU supporters: the block validity consensus is not necessary for BU's security; such consensus would emerge in BU out of economic incentives. Our results invalidate both arguments and therefore disprove BU's security claims. Our paper further contributes to the field by addressing the necessity of a prescribed block validity consensus for cryptocurrencies.
---
paper_title: Bitcoin Mining as a Contest

paper_content:

This paper presents a simple game theoretic framework, assuming complete information, to model Bitcoin mining activity. It does so by formalizing the activity as an all-pay contest: a competition where participants contend with each other to win a prize by investing in computational power, and victory is probabilistic. With at least two active miners, the unique pure strategy Nash equilibrium of the game suggests the following interesting insights on the motivation for being a miner: while the optimal amount of energy consumption depends also on the reward for solving the puzzle, as long as the reward is positive the decision to be an active miner depends only on the mining costs. Moreover, the intrinsic structure of the mining activity seems to prevent the formation of a monopoly, because in an equilibrium with two miners, both of them will have positive expected profits for any level of the opponent’s costs. A monopoly could only form if the rate of return on investment were higher outside bitcoin.
---
paper_title: Optimal Pricing-Based Edge Computing Resource Management in Mobile Blockchain

paper_content:

As the core issue of blockchain, the mining requires solving a proof-of-work puzzle, which is resource expensive to implement in mobile devices due to high computing power needed. Thus, the development of blockchain in mobile applications is restricted. In this paper, we consider the edge computing as the network enabler for mobile blockchain. In particular, we study optimal pricing-based edge computing resource management to support mobile blockchain applications where the mining process can be offloaded to an Edge computing Service Provider (ESP). We adopt a two-stage Stackelberg game to jointly maximize the profit of the ESP and the individual utilities of different miners. In Stage I, the ESP sets the price of edge computing services. In Stage II, 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 uniform and discriminatory pricing schemes. Further, the existence and uniqueness of Stackelberg game are validated for both pricing schemes. At last, the performance evaluation shows that the ESP intends to set the maximum possible value as the optimal price for profit maximization under uniform pricing. In addition, the discriminatory pricing helps the ESP encourage higher total service demand from miners and achieve greater profit correspondingly.
---

Title: A Survey on Blockchain: A Game Theoretical Perspective

Section 1: INTRODUCTION
Description 1: Introduce blockchain technology, motivations, and the application of game theory to blockchain networks.

Section 2: OVERVIEW AND FUNDAMENTALS OF BLOCKCHAIN
Description 2: Provide insights into blockchain concepts, data organization, working mechanisms, and incentive compatibility.

Section 3: OVERVIEW AND FUNDAMENTALS OF GAME THEORY
Description 3: Introduce the basic terminologies and game models used to analyze strategic interactions within blockchain systems.

Section 4: APPLICATIONS OF GAME THEORY FOR SECURITY
Description 4: Discuss how game theory is used to analyze various security issues in blockchains, such as selfish mining and majority attacks.

Section 5: APPLICATIONS OF GAME THEORY FOR MINING MANAGEMENT
Description 5: Examine the use of game theory for effective mining management, including computational power allocation, fork chain selection, and reward allocation.

Section 6: APPLICATIONS OF GAME THEORY ATOP BLOCKCHAIN PLATFORM
Description 6: Present applications of game theory at the platform level, focusing on crypto-currency economic, transaction transparency, and energy trading.

Section 7: CHALLENGES AND FUTURE DIRECTIONS
Description 7: Outline the challenges and future research directions in applying game theory to blockchain technology, including throughput improvement, alternative consensus mechanisms, and integration with other scenarios.

Section 8: CONCLUSIONS
Description 8: Summarize the key points of the survey, including the motivation for using game theory in blockchain and its potential impacts.