Document Type
Discussion Paper
Publication Date
10-1-2019
CFDP Number
2204
CFDP Pages
11
Journal of Economic Literature (JEL) Code(s)
C72, D02, D47
Abstract
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.
Recommended Citation
Leshno, Jacob and Strack, Philipp, "Bitcoin: An Impossibility Theorem for Proof-of-Work based Protocols" (2019). Cowles Foundation Discussion Papers. 45.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/45