Abstract
Bitcoin is the first and most successful Blockchain system so far. In the Bitcoin system, miners use transaction attached fees as a driving force to mine a new block and package transactions, while users compete by bidding transaction fees for faster confirmation. Considering the particularity of Bitcoin trading system, we take time series into consideration to analyze the transaction rules of Bitcoin system from the perspective of multiple cycles and establish a dynamic game model related to time under Generalised Second Price(GSP) mechanism, and also confirm the model's superiority on saving users' fees, compared with the static game model. Also, we propose the quantification of the user experience quantified by calculating the price difference between the transactions uploaded by the same user within adjacent times, making the transaction process of the Bitcoin system no longer the final say of the transaction price. The dynamic game model shows that there is a perfect Bayesian game equilibrium solution in the payment decision, so there is no incentive for users to change the attached fee, and the whole system is maintained stably. In addition, we verify the dynamic game model from computational experiment. Firstly, it is proved that with the help of revenue discount, the cost saving of the dynamic model is generally higher than that of the static model. Then the user's revenue under the dynamic model is showing an upward trend, and the transactions order under the dynamic model is more stable than that under static model, which can be illustrated mathematically and computationally that the proposed dynamic game model in this paper will help all transactions be processed more efficiently in a uniform pipeline.
Highlights
Blockchain is a novel application model that combines the uniqueness and innovation of computer technology
Compared with the static game model, the main work of this paper is as follows: 1) On the basis of the existing static game model under Generalized Second Price (GSP) mechanism, we take time series into consideration, compare with traditional sorting method and static game model, to analyze the transaction rules of Bitcoin system from the perspective of multiple cycles and establish a dynamic game model related to time under GSP mechanism, and confirm the model’s superiority on saving users’fees, compared with the static game model
3) And we raise a parameter named revenue discount, user revenue under the dynamic model increases with the growing of revenue discount value, approach and surpass the revenue under static model
Summary
Blockchain is a novel application model that combines the uniqueness and innovation of computer technology. In literature [13], Li et al proposed a transaction ranking standard based on GSP mechanism from the perspective of game theory, and verified its advantages over GFP mechanism in saving user expenses. We propose a dynamic game model of bitcoin transaction ranking based on GSP mechanism. Based on the single-round static game model in literature [13], from the perspective of leading a dynamic game, a payment model and a revenue model are respectively established to analyze the Bitcoin transaction pricing problem under GSP mechanism. Considering the applicability of GSP mechanism in maintaining the transaction packaging and verification in Bitcoin system, as well as its advantages proven in both theoretical researches and practical performance, it can be shown that employing the GSP model to replace the currently adopted GFP model is a timely and meaningful research innovation [13]. The revenue discount is designed as follows according to different degrees of loss: i
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