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Article Dans Une Revue Review of Financial Studies Année : 2019

The blockchain folk theorem

Résumé

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

Dates et versions

hal-02281914 , version 1 (09-09-2019)

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Citer

Bruno Biais, Christophe Bisière, Matthieu, Bouvard, Catherine Casamatta. The blockchain folk theorem. Review of Financial Studies, 2019, 32 (5), pp.1662-1715. ⟨10.1093/rfs/hhy095⟩. ⟨hal-02281914⟩
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