A novel GSP auction mechanism for ranking Bitcoin transactions in blockchain mining
Li, Juanjuan1,2,3; Yuan, Yong2,3; Wang, Fei-Yue2,3
Source PublicationDECISION SUPPORT SYSTEMS
ISSN0167-9236
2019-09-01
Volume124Pages:12
Corresponding AuthorYuan, Yong(yong.yuan@ia.ac.cn)
AbstractBitcoin is gaining ground in recent years. In the Bitcoin system, miners provide computing power to confirm transactions and mine blocks in pursuit of transaction fees, while users compete by bidding transaction fees for faster confirmation. This process is in essence analogous to online ad auctions, where advertisers bid for more prominent ad slots. Therefore, inspired by the Generalized Second Price (GSP) mechanism dominantly used in online ad auctions, we propose to adopt the GSP auction model in the Bitcoin transaction confirmation game. Also, we use weighted fees as the new ranking basis, which can be calculated by user-submitted fees, transaction size, quality scores and virtual fees accumulated from the waiting time. We show that the formulated static GSP transaction fee auction with complete information has a unique Pure Strategy Nash Equilibrium. Then, we discuss the impacts of quality scores and virtual fees on users' equilibrium fee decisions and payoffs. Finally, computational experiments are designed to validate our theoretical models and analysis. Our research findings indicate that this novel GSP mechanism is superior to the currently adopted GFP mechanism, and can help users save fees. Besides, quality scores and virtual fees are also proven to be effective on reducing users' paid fees. Moreover, the design of virtual fees allows all transactions to be processed more efficiently in a uniform pipeline, and the interests of transactions with and without associated fees are taken into consideration.
KeywordBlockchain Generalized Second Price auction Transaction fee Quality score Virtual fee
DOI10.1016/j.dss.2019.113094
WOS KeywordINTERNET
Indexed BySCI
Language英语
Funding ProjectNational Natural Science Foundation of China[61533019] ; National Natural Science Foundation of China[71702182]
Funding OrganizationNational Natural Science Foundation of China
WOS Research AreaComputer Science ; Operations Research & Management Science
WOS SubjectComputer Science, Artificial Intelligence ; Computer Science, Information Systems ; Operations Research & Management Science
WOS IDWOS:000484648000005
PublisherELSEVIER
Citation statistics
Document Type期刊论文
Identifierhttp://ir.ia.ac.cn/handle/173211/25803
Collection复杂系统管理与控制国家重点实验室_先进控制与自动化
Corresponding AuthorYuan, Yong
Affiliation1.Beijing Inst Technol, Sch Automat, Beijing 100081, Peoples R China
2.Chinese Acad Sci, Inst Automat, State Key Lab Management & Control Complex Syst, Beijing 100190, Peoples R China
3.Qingdao Acad Intelligent Ind, Qingdao 266109, Shandong, Peoples R China
First Author AffilicationChinese Acad Sci, Inst Automat, State Key Lab Management & Control Complex Syst, Beijing 100190, Peoples R China
Corresponding Author AffilicationChinese Acad Sci, Inst Automat, State Key Lab Management & Control Complex Syst, Beijing 100190, Peoples R China
Recommended Citation
GB/T 7714
Li, Juanjuan,Yuan, Yong,Wang, Fei-Yue. A novel GSP auction mechanism for ranking Bitcoin transactions in blockchain mining[J]. DECISION SUPPORT SYSTEMS,2019,124:12.
APA Li, Juanjuan,Yuan, Yong,&Wang, Fei-Yue.(2019).A novel GSP auction mechanism for ranking Bitcoin transactions in blockchain mining.DECISION SUPPORT SYSTEMS,124,12.
MLA Li, Juanjuan,et al."A novel GSP auction mechanism for ranking Bitcoin transactions in blockchain mining".DECISION SUPPORT SYSTEMS 124(2019):12.
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