Journal of Economic Literature (JEL) Code(s)
C72, D02, D47
A key part of decentralized consensus protocols is a procedure for random selection, which is the source of the majority of miners cost and wasteful energy consumption in Bitcoin. We provide a simple economic model for random selection mechanism and show that any PoW protocol with natural desirable properties is outcome equivalent to the random selection mechanism used in Bitcoin.
Leshno, Jacob and Strack, Philipp, "Bitcoin: An Impossibility Theorem for Proof-of-Work based Protocols" (2019). Cowles Foundation Discussion Papers. 45.