Decentralized Mining Pool Games in Blockchain

Abstract

We use cooperative game theory to model mining pools and design reward allocation schemes in this paper. Specifically, we propose a cooperative game model named as “Decentralized Mining Pool Game (DMPG)” The player set of DMPG is the set of all pool managers and the utility function is defined as the sum of block rewards and transaction fees. In our model, we take miners in pools as normal nodes rather than only as computational powers, that is, all miners joining mining pools also participate in the propagation and validation of transactions in the network, this setting can effectively avoid the formation of centralized mining pools. We design two kinds of reward allocation schemes for DMPG and present efficient methods to compute them. One scheme is the stable allocation scheme which focuses on maintaining the rationality of miners (i.e. the core of DMPG) and the security of mining pools (i.e. resistance to pool block withholding attack). The other kind of scheme is the fair allocation scheme which focuses on the fairness of miners (i.e. the Shapley value of DMPG).