Mining Incentive and Reward Analysis in Blockchain Systems

MA Jingyu, LI Quanlin

Journal of Systems Science and Mathematical Sciences ›› 2024, Vol. 44 ›› Issue (12) : 3626-3640.

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Journal of Systems Science and Mathematical Sciences ›› 2024, Vol. 44 ›› Issue (12) : 3626-3640. DOI: 10.12341/jssms23673

Mining Incentive and Reward Analysis in Blockchain Systems

  • MA Jingyu1, LI Quanlin2
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Abstract

Active mining behaviour of miners is fundamental to maintaining the secure and stable operation of blockchain systems, as well as realising the sustainable development of blockchain ecosystem. Therefore, effectively incentivizing the mining behaviour of the miners is of significant theoretical and practical importance. In this paper, we focus on investigating a PoW (Proof of Work) blockchain queueing system. By establishing a continuous-time Markov reward process of the GI/M/1 type, we compute the expression for the miners' long-run average profit and provide a sufficient condition for their profitability. In addition, to evaluate the miners' short-run benefits and risks, we utilize RG-factorization based on the Markov reward process to obtain expectations and variances of the short-run accumulated profits. We hope that the methodology and results derived in this paper can shed light on the study of mining incentives in blockchain systems, while also provide novel ideas and mathematical analysis approaches for economics and management issues related to blockchain technology.

Key words

Blockchain / mining incentive / queueing theory / Markov reward process / RG-factorization

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MA Jingyu , LI Quanlin. Mining Incentive and Reward Analysis in Blockchain Systems. Journal of Systems Science and Mathematical Sciences, 2024, 44(12): 3626-3640 https://doi.org/10.12341/jssms23673

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