Towards A More Stable Bitcoin Transaction Fee Design
Primary Investigator:
Wenhai Sun
Tiantian Gong, Wenhai Sun, Baijian Yang
Abstract
Bitcoin currently provides block rewards and transaction fees as incentives for miners. This mechanism has been proven to be incentive incompatible. Further when the block rewards subside and fees become the incentivization pillar of Bitcoin system, the stability of the system is to be questioned due to the time-varying nature of transaction fees under current protocols[1]. We dig deeper into the complex security and economic implications in an attempt to reveal the impactful fee-choosing strategies and shed light on one transaction fee design to restore the equilibrium in the presence of deviate mining behaviors.