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A Hashing Power Allocation Game with and without Risk-free Asset

Author

Listed:
  • Cheng Yukun

    (School of Business, Suzhou University of Science and Technology, Suzhou215009, China)

  • Du Donglei

    (Faculty of Management, University of New Brunswick, NB Canada, FrederictonE3B 9Y2, Canada)

  • Han Qiaoming

    (School of Economics & Management, Nanjing Tech University, Nanjing211800, China)

Abstract

Miners in various blockchain-backed cryptocurrency networks compete to maintain the validity of the underlying distributed ledgers to earn the bootstrapped cryptocurrencies. With limited hashing power, each miner needs to decide how to allocate their resource to different cryptocurrencies so as to achieve the best overall payoff. Together all the miners form a hashing power allocation game. We consider two settings of the game, depending on whether each miner can allocate their fund to a risk-free asset or not. We show that this game admits unique pure Nash equilibrium in closed-form for both settings.

Suggested Citation

  • Cheng Yukun & Du Donglei & Han Qiaoming, 2021. "A Hashing Power Allocation Game with and without Risk-free Asset," Journal of Systems Science and Information, De Gruyter, vol. 9(3), pages 255-265, June.
    • Handle: RePEc:bpj:jossai:v:9:y:2021:i:3:p:255-265:n:7
    DOI: 10.21078/JSSI-2021-255-11
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    References listed on IDEAS

    as
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    3. Sergiu Hart, 2008. "Discrete Colonel Blotto and General Lotto games," International Journal of Game Theory, Springer;Game Theory Society, vol. 36(3), pages 441-460, March.
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