CFDP 2204
Bitcoin: An Impossibility Theorem for Proof-of-Work based Protocols
Author(s):Publication Date: October 2019
Pages: 11
Abstract:
A key part of decentralized consensus protocols is a procedure for random selection, which is the source of the majority of miners cost and wasteful energy consumption in Bitcoin. We provide a simple economic model for random selection mechanism and show that any PoW protocol with natural desirable properties is outcome equivalent to the random selection mechanism used in Bitcoin.
Keywords: Bitcoin, Random Selection, Proportional Selection Rule, Impossibility Theorem
JEL Classification Codes: C72, D02, D47