IDEAS home Printed from https://ideas.repec.org/p/osf/socarx/eusxg.html

Blockchain State Machine Representation

Author

Listed:
  • Shorish, Jamsheed

    (Shorish Research)

Abstract

We present a formalization of blockchain as a state machine, focusing upon permissionless blockchains due to general audience awareness of its most popular implementation, Bitcoin (permissioned blockchains are treated similarly without loss of generality). After presenting a typical Bitcoin transaction workflow, a general blockchain state representation is derived. It is demonstrated that the proper mathematical object defining the state of a blockchain is a topological fiber bundle, because it is not possible to globally `parametrize' blocks (or ledgers of blocks) by time due to their dependence upon cryptographic hash functions. In addition, we specify a general transition function between blockchain states that is agnostic to the consensus mechanism used to write blocks into the ledger, and which is probabilistic in nature, so that blockchain may be regarded as a probabilistic state machine. We then interpret agents (both human and code-based, such as `chaincode', `smart contracts', or other artificial intelligence) as automata interacting with blockchain technology, drawing upon the theory of non-cooperative repeated interaction games. Finally, blockchain as a hierarchy of state machines is defined, and future research directions are presented using this hierarchy as a point of departure for modeling blockchain dynamics.

Suggested Citation

  • Shorish, Jamsheed, 2018. "Blockchain State Machine Representation," SocArXiv eusxg, Center for Open Science.
    • Handle: RePEc:osf:socarx:eusxg
    DOI: 10.31219/osf.io/eusxg
    as

    Download full text from publisher

    File URL: https://osf.io/download/5a66ee943623a3000e615e8e/
    Download Restriction: no
    File URL: https://libkey.io/10.31219/osf.io/eusxg?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Martin J. Osborne & Ariel Rubinstein, 1994. "A Course in Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650401, December.
    2. Christian Catalini & Joshua S. Gans, 2016. "Some Simple Economics of the Blockchain," NBER Working Papers 22952, National Bureau of Economic Research, Inc.
    3. Abreu, Dilip & Rubinstein, Ariel, 1988. "The Structure of Nash Equilibrium in Repeated Games with Finite Automata," Econometrica, Econometric Society, vol. 56(6), pages 1259-1281, November.
    4. Rainer Böhme & Nicolas Christin & Benjamin Edelman & Tyler Moore, 2015. "Bitcoin: Economics, Technology, and Governance," Journal of Economic Perspectives, American Economic Association, vol. 29(2), pages 213-238, Spring.
    5. Rubinstein, Ariel, 1986. "Finite automata play the repeated prisoner's dilemma," Journal of Economic Theory, Elsevier, vol. 39(1), pages 83-96, June.
    6. Aleksander Berentsen & Fabian Schär, 2018. "A Short Introduction to the World of Cryptocurrencies," Review, Federal Reserve Bank of St. Louis, vol. 100(1), pages 1-16.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Federico Fioravanti & Fernando Tohmé, 2020. "Asking Infinite Voters ‘Who is a J?’: Group Identification Problems in ℕ$\mathbb {N}$," Journal of Classification, Springer;The Classification Society, vol. 37(1), pages 58-65, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:osf:socarx:eusxg_v1 is not listed on IDEAS
    2. Hamid Sabourian & Jihong Lee, 2004. "Complexity and Efficiency in Repeated Games with Negotiation," Econometric Society 2004 Far Eastern Meetings 401, Econometric Society.
    3. Spiegler, Ran, 2005. "Testing threats in repeated games," Journal of Economic Theory, Elsevier, vol. 121(2), pages 214-235, April.
    4. Hubie Chen, 2013. "Bounded rationality, strategy simplification, and equilibrium," International Journal of Game Theory, Springer;Game Theory Society, vol. 42(3), pages 593-611, August.
    5. Demichelis, Stefano & Weibull, Jörgen, 2006. "Efficiency, communication and honesty," SSE/EFI Working Paper Series in Economics and Finance 645, Stockholm School of Economics, revised 28 Nov 2006.
    6. Lambert, Nicolas S. & Marple, Adrian & Shoham, Yoav, 2019. "On equilibria in games with imperfect recall," Games and Economic Behavior, Elsevier, vol. 113(C), pages 164-185.
    7. Yuval Salant & Jörg L. Spenkuch, 2021. "Complexity and Choice," CESifo Working Paper Series 9239, CESifo.
    8. Stefano Demichelis & Jorgen W. Weibull, 2008. "Language, Meaning, and Games: A Model of Communication, Coordination, and Evolution," American Economic Review, American Economic Association, vol. 98(4), pages 1292-1311, September.
    9. Lee, J. & Sabourian, H., 2004. "Complexity and Efficiency in Repeated Games and Negotiation," Cambridge Working Papers in Economics 0419, Faculty of Economics, University of Cambridge.
    10. Jihong Lee & Hamid Sabourian, 2005. "Efficiency in Negotiation: Complexity and Costly Bargaining," Birkbeck Working Papers in Economics and Finance 0505, Birkbeck, Department of Economics, Mathematics & Statistics.
    11. Hamid Sabourian & Jihong Lee, 2004. "Complexity and Efficiency in the Negotiation Game," Econometric Society 2004 North American Winter Meetings 82, Econometric Society.
    12. Eliaz, Kfir, 2003. "Nash equilibrium when players account for the complexity of their forecasts," Games and Economic Behavior, Elsevier, vol. 44(2), pages 286-310, August.
    13. Peter Fratrič & Giovanni Sileno & Sander Klous & Tom Engers, 2022. "Manipulation of the Bitcoin market: an agent-based study," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 8(1), pages 1-29, December.
    14. David Baron & Ehud Kalai, 1990. "Dividing a Cake by Majority: The Simplest Equilibria," Discussion Papers 919, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    15. Tracy Xiao Liu & Jenna Bednar & Yan Chen & Scott Page, 2019. "Directional behavioral spillover and cognitive load effects in multiple repeated games," Experimental Economics, Springer;Economic Science Association, vol. 22(3), pages 705-734, September.
    16. Wang Guizhou & Zhang Si & Yu Tao & Ning Yu, 2021. "A Systematic Overview of Blockchain Research," Journal of Systems Science and Information, De Gruyter, vol. 9(3), pages 205-238, June.
    17. Jehiel, Philippe, 1998. "Learning to Play Limited Forecast Equilibria," Games and Economic Behavior, Elsevier, vol. 22(2), pages 274-298, February.
    18. Luca Anderlini (Georgetown University), Dino Gerardi (Yale University), Roger Lagunoff (Georgetown University), 2004. "The Folk Theorem in Dynastic Repeated Games," Working Papers gueconwpa~04-04-09, Georgetown University, Department of Economics.
    19. EL-Seidy, Essam, 2015. "The effect of noise and average relatedness between players in iterated games," Applied Mathematics and Computation, Elsevier, vol. 269(C), pages 343-350.
    20. Rubinstein, A. & Wolnsky, A., 1992. "A Rermark on Infinitely Repeated Extensive Games," Papers 4-92, Tel Aviv - the Sackler Institute of Economic Studies.
    21. Misha Gavrilovich & Victoria Kreps, 2018. "Games with Symmetric Incomplete Information and Asymmetric Computational Resources," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 20(02), pages 1-16, June.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:osf:socarx:eusxg. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: OSF (email available below). General contact details of provider: https://arabixiv.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.