[2309.02297] Smoothening block rewards: How much should miners pay for mining pools?
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Computer Science > Cryptography and Security

arXiv:2309.02297 (cs)
[Submitted on 5 Sep 2023]

Title:Smoothening block rewards: How much should miners pay for mining pools?

Authors:Axel Cortes-Cubero, Juan P. Madrigal-Cianci, Kiran Karra, Zixuan Zhang
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Abstract:The rewards a blockchain miner earns vary with time. Most of the time is spent mining without receiving any rewards, and only occasionally the miner wins a block and earns a reward. Mining pools smoothen the stochastic flow of rewards, and in the ideal case, provide a steady flow of rewards over time. Smooth block rewards allow miners to choose an optimal mining power growth strategy that will result in a higher reward yield for a given investment. We quantify the economic advantage for a given miner of having smooth rewards, and use this to define a maximum percentage of rewards that a miner should be willing to pay for the mining pool services.
Comments: 15 pages, 1 figure
Subjects: Cryptography and Security (cs.CR)
Cite as: arXiv:2309.02297 [cs.CR]
  (or arXiv:2309.02297v1 [cs.CR] for this version)
  https://doi.org/10.48550/arXiv.2309.02297

Submission history

From: Kiran Karra [view email]
[v1] Tue, 5 Sep 2023 14:59:01 UTC (87 KB)
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