Transaction Queuing Game in Bitcoin BlockChain

Abstract

Bitcoin is a novel protocol with the potential of enabling a decentralized and trustless cryptographic currency, and its underlying technology named blockchain operates on a worldwide basis via a complex set of rules originally proposed by Nakomoto in 2008. In Bitcoin blockchain, miners provide computational services (i.e. mining) to get profits from the fixed rewards of newly found block and also transaction fees from recording the users’ transactions to the blocks. With the decreasing of the fixed new block reward, transaction fees will play the role as the main profit source of miners, thus provide important supports for the sustainability and vitality of the Bitcoin system. Therefore, it is of great necessity to research transaction fees. In this paper, we investigate transaction fees in a queuing game with non-preemptive priority, in which both the miners’ mining rewards and the users’ time cost are highlighted. Then, we conduct theoretical analysis of the game, getting five types of Nash equilibria of the game. We also find that the over-long waiting time will bring negative marginal profits on transaction fees to some users with low time cost, therefore, they will not be willing to offer transaction fees.