Figure 1 - uploaded by Kerem Kaskaloglu
Content may be subject to copyright.
Source publication
Under Bitcoin protocol and payment scheme, anyone can send any amount of bitcoins that he owns to anywhere in the world via internet, near instantly for near zero fees. While the popular crypto-currency enjoys low transaction fees, a feature that is highly promoted and is working fine for the current state of the Bitcoin ecosystem, we argue that in...
Contexts in source publication
Context 1
... of all, the supply of new bitcoins is only through the block rewards for miners. There is a periodic halving in the block reward, resulting in a logarithmic supply of wealth, decreasing gradually over time as in monetary base, figure 1. The reason why a linear supply is not offered is to avoid inflation. ...
Context 2
... a logarithmic supply of the number of bitcoins in circulation as part of the design is the inflation to diminish shortly after the initial launch 9 . The relation of number of blocks issued at any time (in correlation with time) and the inflation of bitcoins is also illustrated in figure 1. As mentioned before, this inflation of supply is to be replaced by a deflation soon after a point when the accidentally lost bitcoins outnumber the newly minted ones. ...
Context 3
... in the block chain so that even if it is accomplished, the block chain does not really require a manual cleanup by the core developers. The attacker will be in control for a temporary period of time, and in that period, he can interfere with transactions in such a way that he can prevent them from gaining any confirmations and can perform a so-called double spend attack [11], but the attacker cannot reverse other users' transactions forever and cannot prevent transactions from being sent at all (they will show as 0/unconfirmed). Most importantly, the adversary cannot change specifications of the protocol, cannot create coins out of thin air, cannot send coins that never belonged to him and cannot steal somebody else’s coins. The aforementioned double spend attack is a type of counterfeit that is in analogy with that of physical currencies such as US dollar. It may be argued that a currency does not have to be perfect to be practical. US dollar actually has a serious counterfeit rate and many small merchants in the US do not accept 100$ bills for that reason. But this does not stop the general public from using US dollar even outside of the mainland. Similarly, one may argue that an occasional double spend attack may not kill Bitcoin as it is in a loose analogy with counterfeit bills. However, such attacks should be prevented as much as possible and the way this works is the network having a large enough total hash rate and an incentive for miners to provide so. Actually, the reason why users of the system are encouraged to wait for enough many confirmations that are ideally proportional to the amount of BTC they are receiving is given as a precaution in [1] is the possibility of 51% attacks. The likelihood of a 51% attack is also highly related with centralization of mining pools, which is regar ded as ‘disturbing’, and ‘dangerous’ by the Bitcoin community. That is, in case of mining, pools are focus of attention as possible sources of attacks as briefly considered in [12]. We are ready to consider the problem 5 , Imposing a transaction fee is essentially tax revenue of the service provided by the miners. As more hash power that the miner pours in means a more secure network, it is reasonable that the reward of the miner is proportional to the hash power he contributes. However, how users should be charged is not as clear as how the wealth should be collected by the miners. Indeed, determining the right transaction fee as a policy and forcing it in the client software as a regulation is crucial for the future of Bitcoin and similar alternative crypto-currencies. The problem of determining the optimum transaction fees are interrelated with various surrounding aspects. Statistically speaking, the number of transactions per second (tps) of Bitcoin increases over time 6 , as well as the wealth carried by the transactions. That is, in the early days of Bitcoin, users usually experimented the protocol by smaller transactions, whereas today, the average value contained in a transaction is significantly higher. Although the idea that transaction fees should be proportional to the amount of bitcoins transferred would be quite disruptive among some bitcoin users, economically, this is plausible in the sense that the users transferring the largest amount of bitcoins are the individuals that have the most benefit of Bitcoin. This is obvious especially when one considers the daily transaction limits imposed by governments and banks. Such limits, varying by the monetary policy of the country that one lives in, are actually one of the reasons Bitcoin drives so much attention because Bitcoin allows one to simply exceed such limits. That is, there is no transfer limit on Bitcoin protocol imposed by any third party and this is one of the promoted features. It is not uncommon to see transactions in millions of US dollars 7 . On the other side, Bitcoin is currently promoted as the best transfer method for transactions carrying tiny amounts, often regarded as micro- transactions . This means that paying a certain fixed minimal fee (such as in magnitude of cents) for each transaction may hinder some possible future usage scenarios of Bitcoin, such as tipping online content providers (videos, forum answers etc.). Regarding this, there are discussions in the community that micro- transactions can be taken off the block chain into newly discussed structures called side- chains . However, more research on the topic seems to be required to determine how such a shift from the main block chain would function. Private exchange and online wallet companies may also help providing such a service 8 at the cost of centralization of the transactions. The transaction fees and bitcoin price are related as follows. First of all, the supply of new bitcoins is only through the block rewards for miners. There is a periodic halving in the block reward, resulting in a logarithmic supply of wealth, decreasing gradually over time as in monetary base, figure 1. The reason why a linear supply is not offered is to avoid inflation. As no central authority is present, there is no government to mint money. Although the network is still in a temporary low-inflation state, Bitcoin is eventually meant to be deflationary. Currently, there are about 12.5 million bitcoins in circulation as of 2014. In 2033, this number is expected to exceed 20 million and increase slightly each year thereafter until 2140. Such a logarithmic supply of the number of bitcoins in circulation as part of the design is the inflation to diminish shortly after the initial launch 9 . The relation of number of blocks issued at any time (in correlation with time) and the inflation of bitcoins is also illustrated in figure 1. As mentioned before, this inflation of supply is to be replaced by a deflation soon after a point when the accidentally lost bitcoins outnumber the newly minted ones. One may argue that the significant scarcity in the supply of bitcoins might not affect the incentive of miners as the lesser amounts of bitcoins rewarded carry higher and higher value in price as the price of bitcoin dramatically increases over time. In other words, to numerically exemplify, for the price to keep up with the incentive of miners, the tens of thousands of bitcoins produced each year after 2030 should have the same price with the millions of bitcoins produced each year now. However, this assumption cannot be correct. Although it is true that until now the price of a bitcoin has increased dramatically 10 , this cannot last forever as even the most optimistic prediction about continuation of price rice involves a slow down after half way as the number of potential users that may adopt Bitcoin in the globe is limited. Theoretically, the best case scenario about adoption of Bitcoin as a technology is the logistic growth as depicted in figure 2. The graph may arguably apply to both the price of a bitcoin and also the number of users of bitcoin. Actually, these two parameters are correlated as the price of bitcoin is determined by the demand and the limited supply. The increasing demand that emerges from an increasing number of users together with a limited supply naturally causes the price to rise. On the other hand, in financial terms, the limited supply over time and the eventual limit on the price of a bitcoin have a combined effect such that the marginal production cost of mining is going to increase dramatically, which must instead be set fairly constant over time. In the long run, the policy on transaction fees should be set so that enough many miners have incentive to run clients having a good enough combined hash power to protect the network. But on the other side of the coin, the fees that miners collect should not be any higher than sufficient in order not to discourage users from using Bitcoin as a means of transferring money. Miners with sufficient combined hash power are not the only requirement to secure the network. Another aspect is the number of full nodes, which have a similar level of importance. Full nodes are actually quite “smart” at running the network as they provide lookup of historic blocks, which is necessary for new nodes synchronizing, and they also validate blocks and transactions, and relay them. As the network right now is under trivial load, we do not exactly know how many full nodes are going to be needed in the future and this is one of the open question requiring further empirical studies. The number of full nodes in the globe dramatically decreases over time and end-users tend to switch to easy-to-run lightweight clients that are intended for personal usage instead of full nodes. However, the exchange and wallet services and other similar service providers will still have to run a full Bitcoin client, and the number of such services tends to increase over time and the indeed full nodes provided by these services only might suffice. We claim that the solution of setting the right transaction fee in the future is not trivial, and a fixed number (such as $0.41 per transaction) mentioned by a core developer of Bitcoin [13], as a study for cost per transaction, do not apply as a transaction fee right now as the block rewards are currently good enough to keep a sufficient number of miners provide a good amount of hash power to secure the network. The transaction fees collected as donations from each block is a mere fraction of the block reward 11 and this is good enough. Currently, Bitcoin nodes have the option to exclude transactions that do not donate. In general, there are interesting related technical trade-offs because of the structure of the Bitcoin protocol such as: the more transactions a miner include, the more his reward increases but also his probability to earn any reward decreases because the time needed for his block to reach consensus depends on its size due to network propagation. As mentioned before, fixing the transaction fee and requiring the same ...
Context 4
... aforementioned double spend attack is a type of counterfeit that is in analogy with that of physical currencies such as US dollar. It may be argued that a currency does not have to be perfect to be practical. US dollar actually has a serious counterfeit rate and many small merchants in the US do not accept 100$ bills for that reason. But this does not stop the general public from using US dollar even outside of the mainland. Similarly, one may argue that an occasional double spend attack may not kill Bitcoin as it is in a loose analogy with counterfeit bills. However, such attacks should be prevented as much as possible and the way this works is the network having a large enough total hash rate and an incentive for miners to provide so. Actually, the reason why users of the system are encouraged to wait for enough many confirmations that are ideally proportional to the amount of BTC they are receiving is given as a precaution in [1] is the possibility of 51% attacks. The likelihood of a 51% attack is also highly related with centralization of mining pools, which is regar ded as ‘disturbing’, and ‘dangerous’ by the Bitcoin community. That is, in case of mining, pools are focus of attention as possible sources of attacks as briefly considered in [12]. We are ready to consider the problem 5 , Imposing a transaction fee is essentially tax revenue of the service provided by the miners. As more hash power that the miner pours in means a more secure network, it is reasonable that the reward of the miner is proportional to the hash power he contributes. However, how users should be charged is not as clear as how the wealth should be collected by the miners. Indeed, determining the right transaction fee as a policy and forcing it in the client software as a regulation is crucial for the future of Bitcoin and similar alternative crypto-currencies. The problem of determining the optimum transaction fees are interrelated with various surrounding aspects. Statistically speaking, the number of transactions per second (tps) of Bitcoin increases over time 6 , as well as the wealth carried by the transactions. That is, in the early days of Bitcoin, users usually experimented the protocol by smaller transactions, whereas today, the average value contained in a transaction is significantly higher. Although the idea that transaction fees should be proportional to the amount of bitcoins transferred would be quite disruptive among some bitcoin users, economically, this is plausible in the sense that the users transferring the largest amount of bitcoins are the individuals that have the most benefit of Bitcoin. This is obvious especially when one considers the daily transaction limits imposed by governments and banks. Such limits, varying by the monetary policy of the country that one lives in, are actually one of the reasons Bitcoin drives so much attention because Bitcoin allows one to simply exceed such limits. That is, there is no transfer limit on Bitcoin protocol imposed by any third party and this is one of the promoted features. It is not uncommon to see transactions in millions of US dollars 7 . On the other side, Bitcoin is currently promoted as the best transfer method for transactions carrying tiny amounts, often regarded as micro- transactions . This means that paying a certain fixed minimal fee (such as in magnitude of cents) for each transaction may hinder some possible future usage scenarios of Bitcoin, such as tipping online content providers (videos, forum answers etc.). Regarding this, there are discussions in the community that micro- transactions can be taken off the block chain into newly discussed structures called side- chains . However, more research on the topic seems to be required to determine how such a shift from the main block chain would function. Private exchange and online wallet companies may also help providing such a service 8 at the cost of centralization of the transactions. The transaction fees and bitcoin price are related as follows. First of all, the supply of new bitcoins is only through the block rewards for miners. There is a periodic halving in the block reward, resulting in a logarithmic supply of wealth, decreasing gradually over time as in monetary base, figure 1. The reason why a linear supply is not offered is to avoid inflation. As no central authority is present, there is no government to mint money. Although the network is still in a temporary low-inflation state, Bitcoin is eventually meant to be deflationary. Currently, there are about 12.5 million bitcoins in circulation as of 2014. In 2033, this number is expected to exceed 20 million and increase slightly each year thereafter until 2140. Such a logarithmic supply of the number of bitcoins in circulation as part of the design is the inflation to diminish shortly after the initial launch 9 . The relation of number of blocks issued at any time (in correlation with time) and the inflation of bitcoins is also illustrated in figure 1. As mentioned before, this inflation of supply is to be replaced by a deflation soon after a point when the accidentally lost bitcoins outnumber the newly minted ones. One may argue that the significant scarcity in the supply of bitcoins might not affect the incentive of miners as the lesser amounts of bitcoins rewarded carry higher and higher value in price as the price of bitcoin dramatically increases over time. In other words, to numerically exemplify, for the price to keep up with the incentive of miners, the tens of thousands of bitcoins produced each year after 2030 should have the same price with the millions of bitcoins produced each year now. However, this assumption cannot be correct. Although it is true that until now the price of a bitcoin has increased dramatically 10 , this cannot last forever as even the most optimistic prediction about continuation of price rice involves a slow down after half way as the number of potential users that may adopt Bitcoin in the globe is limited. Theoretically, the best case scenario about adoption of Bitcoin as a technology is the logistic growth as depicted in figure 2. The graph may arguably apply to both the price of a bitcoin and also the number of users of bitcoin. Actually, these two parameters are correlated as the price of bitcoin is determined by the demand and the limited supply. The increasing demand that emerges from an increasing number of users together with a limited supply naturally causes the price to rise. On the other hand, in financial terms, the limited supply over time and the eventual limit on the price of a bitcoin have a combined effect such that the marginal production cost of mining is going to increase dramatically, which must instead be set fairly constant over time. In the long run, the policy on transaction fees should be set so that enough many miners have incentive to run clients having a good enough combined hash power to protect the network. But on the other side of the coin, the fees that miners collect should not be any higher than sufficient in order not to discourage users from using Bitcoin as a means of transferring money. Miners with sufficient combined hash power are not the only requirement to secure the network. Another aspect is the number of full nodes, which have a similar level of importance. Full nodes are actually quite “smart” at running the network as they provide lookup of historic blocks, which is necessary for new nodes synchronizing, and they also validate blocks and transactions, and relay them. As the network right now is under trivial load, we do not exactly know how many full nodes are going to be needed in the future and this is one of the open question requiring further empirical studies. The number of full nodes in the globe dramatically decreases over time and end-users tend to switch to easy-to-run lightweight clients that are intended for personal usage instead of full nodes. However, the exchange and wallet services and other similar service providers will still have to run a full Bitcoin client, and the number of such services tends to increase over time and the indeed full nodes provided by these services only might suffice. We claim that the solution of setting the right transaction fee in the future is not trivial, and a fixed number (such as $0.41 per transaction) mentioned by a core developer of Bitcoin [13], as a study for cost per transaction, do not apply as a transaction fee right now as the block rewards are currently good enough to keep a sufficient number of miners provide a good amount of hash power to secure the network. The transaction fees collected as donations from each block is a mere fraction of the block reward 11 and this is good enough. Currently, Bitcoin nodes have the option to exclude transactions that do not donate. In general, there are interesting related technical trade-offs because of the structure of the Bitcoin protocol such as: the more transactions a miner include, the more his reward increases but also his probability to earn any reward decreases because the time needed for his block to reach consensus depends on its size due to network propagation. As mentioned before, fixing the transaction fee and requiring the same small amount such as in [13] would make micro-transactions under that amount too expensive to process. Limiting the maximum block size so that the maximum number of transactions per block is capped has its own inconveniences. The underlying idea in such an approach is that it makes the number of transactions that can be included so scarce that the ones providing fees under a certain threshold might not reach destination or might face serious delays. Indeed this threshold will be a dynamic one depending on the instantaneous traffic of transactions so that the sender will not be able to figure out whether her transaction will be delayed or not in advance. It is also interesting to note that, [14], in a simplified setting, forcing ...
Similar publications
Crowdsourcing is a process where an individual or an organization utilizes the talent pool present over the Internet to accomplish their task(s). These platforms offer numerous advantages such as reduced cost, better quality, and lower task completion time. To execute tasks efficiently, with the worker pool available on the platform, task posters r...
Citations
... Lo de costes de transacción cero es muy discutible, para más información verKaskaloglu, K. (2014). Near Zero Bitcoin Transaction Fees Cannot Last Forever ...
Las criptomonedas se muestran ante el gran público como moneda o una
alternativa atractiva al dinero convencional. Y cuyos defensores las sitúan muy
por encima del dinero fiduciario que hoy domina nuestras transacciones.
En este trabajo se intenta un acercamiento a los fundamentos y naturaleza
de la existencia de estos criptoactivos desde la perspectiva crediticia del dinero,
en oposición de la teoría ortodoxa del dinero mercancía, aunque no sea el
objetivo de este trabajo. Estos activos no tendrían existencia posible sin la
existencia de Internet y del desarrollo de un software adecuado.
En primer lugar, en la sección 3.1 se ha adoptado la teoría crediticia del
dinero, donde se ha hecho un análisis integral sobre la génesis de este para
entender una cuestión esencial para este trabajo. ¿Qué es el dinero?
En segundo lugar, en la sección 3.2 se ha profundizado cerca las
criptomonedas con diferentes acepciones del dinero y la raíz de su existencia.
En tercer lugar, en la sección 3.3 se ha analizado una comparativa sobre
lo que da valor a estos activos, como se comportan y si realmente pueden sustituir
al dinero convencional.
Por último, se concluye que las criptomonedas están lejos de comportarse
como dinero, pues ¿si no son dinero, que tipo de activos son?
... Their revenues include a fixed number of system-generated Bitcoins issued in the Coinbase transactions, and also the usersubmitted transaction fees. Although the incentive of the mining process relies largely on the new block reward so far [15,16], the amount of block reward is preset Fig. 1 The transaction confirmation in the Bitcoin system Content courtesy of Springer Nature, terms of use apply. Rights reserved. ...
... Generally speaking, the larger the required transaction fee is, the longer a transaction could reside in the memory pool [25]; adversely, the higher the submitted fee is, the faster a transaction will be confirmed [18]. However, exorbitant transaction fees will render Bitcoin uneconomical for micro payments [16,26]. ...
In the Bitcoin system, large numbers of miners invest massive computing resources in the blockchain mining process in pursuit of Bitcoin rewards, which are comprised of a fixed amount of system-generated new block reward and a variable amount of user-submitted transaction fees. Here, transaction fees serve as the important tuner for the Bitcoin system to define the priorities in users’ transaction confirmation. In this paper, we aim to study the priority rule for queueing transactions based on their associated fees, and in turn users’ strategies in formulating their fees in the transaction confirmation game. We first establish a full-information game-theoretical model to study users’ equilibrium fee decisions; and then discuss three types of Nash equilibria, under which no, all and some users submit transaction fees. Moreover, we conduct empirical studies and design computational experiments to validate our theoretical analysis. The experimental results show that (1) users’ fee decisions will be significantly affected by their waiting time; (2) the reduced time costs, instead of transaction values, are the basis for users to evaluate their revenues; (3) longer waiting time and higher unit time cost drive users to submit transaction fees in pursuit of desired priorities; (4) with the required transaction fee increasing, the proportion of fee-submitting users decreases slowly at first followed by a sharp decline, and over-high required fees will make the transaction confirmation game end up with no users submitting fees.
... Bitcoin's transaction fees are too low to motivate bitcoin miners according to Kaşkaloglu [21] and Cussen [10]. ...
We analyzed the Bitcoin difficulty data and noticed that the difficulty has been around the level of \(10^{13}\) for three years (H2 2018–H1 2021). Our calculation showed about \(10^{28}\) hashes have been generated during bitcoin mining around the world for securing the addition of 703,364 blocks to the Bitcoin blockchain. We introduced a concept of Recycling Hashes in the hope to (a) jump-start bespoke silicon (customized silicon) for reversible computing, (b) open up the possibility of Bitcoin’s Proof-of-Work to be less energy-consuming in the future, (c) provide scientific value or new services, in the form of entropy pool or random numbers, to Internet users while still achieving the security level of Bitcoin of today, (d) decrease the old mining hardware e-waste by using them to recycle hashes to the entropy pool, and (e) solve the problem of low mining rewards. We found that the bit rates of the current irreversible bitcoin miners are millions of times as high as the existing Internet connections, so it would be difficult to send all the hashes generated in real-time via the Internet. Even if only 0.000000355% of the hashes can be recycled, it would still mean that \(355\cdot 10^{18}\) hashes (355 EH) would have been recycled since the beginning of Bitcoin. Storing all the hashes, so far, would need storage of \(2.560\cdot 10^{30}\) bits, and it is not currently possible to keep all of them. Our simulation of 10,000 bitcoin hashes showed that the occurrences of zeros and ones in bitcoin hashes are almost 50% and 50%, so it is an encouraging finding for seeding the Pseudorandom Number Generators. We also proposed a second coin for the Bitcoin blockchain, an inflationary coin with a different currency unit (BTCi), to motivate the entropy providers to keep the old mining hardware online. The proposed second coin might keep Bitcoin’s security model safe in the future when the deflationary bitcoin (BTC or BTCd) block reward is becoming too low.KeywordsReversible computingBitcoin miningRandom number generation
... Bitcoin's transaction fees are too low to motivate bitcoin miners, according to Kaşkaloglu [28] and Cussen [17]. According to Alden [4], the Bitcoin network continues to be more energy-efficient each year due to the declining block rewards. ...
We analyzed the Bitcoin difficulty data and noticed that the difficulty has been around the level of \(10^{13}\) for three years (H2 2018 - H1 2021). Our calculation showed about \(10^{28}\) hashes have been generated during bitcoin mining around the world for securing the addition of 703,364 blocks to the Bitcoin blockchain. We introduced a concept of Recycling Hashes in the hope to (a) jump-start bespoke silicon (customized silicon) for reversible computing, (b) open up the possibility of Bitcoin's Proof-of-Work to be less energy-consuming in the future, (c) provide scientific value or new services, in the form of entropy pool or random numbers, to Internet users while still achieving the security level of Bitcoin of today, (d) decrease the old mining hardware e-waste by using them to recycle hashes to the entropy pool, and (e) solve the problem of low mining rewards. We found that the bit rates of the current irreversible bitcoin miners are millions of times as high as the existing Internet connections, so it would be difficult to send all the hashes generated in real-time via the Internet. Even if only 0.000000355\(\%\) of the hashes can be recycled, it would still mean that \(355\cdot 10^{18}\) hashes (355 EH) would have been recycled since the beginning of Bitcoin. Storing all the hashes, so far, would need storage of \(2.560\cdot 10^{30}\) bits, and it is not currently possible to keep all of them. Our simulation of 10,000 bitcoin hashes showed that the occurrences of zeros and ones in bitcoin hashes are almost 50\(\%\) and 50\(\%\), so it is an encouraging finding for seeding the Pseudorandom Number Generators. We also proposed a second coin for the Bitcoin blockchain, an inflationary coin with a different currency unit (BTCi), to motivate the entropy providers to keep the old mining hardware online. The proposed second coin might keep Bitcoin's security model safe in the future when the deflationary bitcoin (BTC or BTCd) block reward is becoming too low.
... In most prevailing blockchain systems, such as Bitcoin [12] and Ethereum [13] , the transaction fee is optional, thus making it unpredictable and seemingly trivial. However, as pointed out in Kaskaloglu [14] , Carlsten et al. [15] , Lavi et al. [16] , transaction fees from users have a significant influence on the system security of blockchain, which becomes even more prominent in blockchain systems with decreasing block rewards. ...
... Riehl et al. [25] proposed a pricing mechanism which aligns the incentives of users exchanging resources on a decentralized ledger, aiming at maximizing the transaction throughput and protecting the security. In [14] , a financial reasoning was conducted to demonstrate the unsustainability of blockchain with zero or infinitesimal transaction fees. Further, as a counterintuitive conclusion, Carlsten et al. [15] proved that whether rewards of miners are coming from blockchain system or transaction fees significantly affects the system security since there exists nearly no equilibrium with favorable security properties. ...
The importance of transaction fees in maintaining blockchain security and sustainability has been confirmed by extensive research, although they are not mandatory in most current blockchain systems. To enhance blockchain in the long term, it is crucial to design effective transaction pricing mechanisms. Different from the existing schemes based on auctions with more consideration about the profit of miners, we resort to game theory and propose a correlated equilibrium based transaction pricing mechanism through solving a pricing game among users with transactions, which can achieve both the individual and global optimum. To avoid the computational complexity exponentially increasing with the number of transactions, we further improve the game-theoretic solution with an approximate algorithm, which can derive almost the same results as the original one but costs significantly reduced time. We also propose a truthful assessment model for pricing mechanism to collect the feedback of users regarding the price suggestion. Extensive experimental results demonstrate the effectiveness and efficiency of our proposed mechanism.
... It does not offer affirmation to waiting data as it does not guarantee complete clearing of the electronic wallet. The case of security scenes [13] does not give openness as the organization is available due to malware defilement and does not protect the data's remainder. It does not guarantee an all-out clearing of the electronic wallet. ...
Cryptochain has attracted the new generation of FinTech technologies because of its disruptive security that adapts to teaching time. In particular, it provides security with peer-to-peer authentication, encryption, and hash generation. According to the FinTech sector, the security market’s technology sector is predicted to grow to $ 20 billion at the end of 2021. With this, the cryptochain can operate across the whole Internet of Things (Cloud) ecosystem; its programs are predicted to expand. Cloud technology has been widely welcomed in all tech fields for its efficiency and reliability. This paper will discuss the theory of cryptochain technology and elated thermal research methods. We will learn how to sync cryptochain security on a cloud with its secure data solutions.
... By removing the intermediary, the development of Bitcoin has the potential to do away with these costs. Transaction fees for bitcoins are in the 0-1% range (Kaskaloglu 2014). Bitcoin offers a welcome alternative when high transaction costs of traditional transactions either disincentives the transaction altogether or diminish its benefits (Dierksmeier and Seele 2018). ...
A vast digital ecosystem of entrepreneurship and exchange has sprung up with Bitcoin’s digital infrastructure at its core. We explore the worldwide spread of infrastructure necessary to maintain and grow Bitcoin as a system (Bitcoin nodes) and infrastructure enabling the use of bitcoins for everyday economic transactions (Bitcoin merchants). Specifically, we investigate the role of legal, criminal, financial, and social determinants of the adoption of Bitcoin infrastructure. We offer some support for the view that the adoption of cryptocurrency infrastructure is driven by perceived failings of traditional financial systems, in that the spread of Bitcoin infrastructure is associated with low trust in banks and the financial system among inhabitants of a region, and with the occurrence of country-level inflation crises. On the other hand, our findings also suggest that active support for Bitcoin is higher in locations with well-developed banking services. Finally, we find support for the view that bitcoin adoption is also partly driven by cryptocurrencies’ usefulness in engaging in illicit trade.
... During the initial stage of the Bitcoin project, users need to provide the default transaction fee, and miners are required to process the transactions according to the system settings even for the zero fee transactions, whereas users prefer to offer a higher transaction fee to attract miners in order to reduce the transaction processing waiting time with the growth of transaction volume and users [11]. As recorded in the official document of Bitcoin, the transaction fees are not required for some certain types of transactions though the zero transaction fees cannot be financially sustainable with the development of Bitcoin [12]. ...
As the blockchain platform is widely used as a new trading way, both participants and transaction volume in the blockchain projects have been growing by leaps and bounds. The generic mechanisms of ranking transaction priorities are heavily dependent on the transaction fees the users append into each transaction; then, all transactions are ranked in the nonincreasing order according to the transaction fee amounts, and the selected transactions will be packed into a new created block in order based on the ranking results. However, more complex influence factors more than transaction fees on transaction priority ranking results are not taken into consideration in the generic transaction priority ranking mechanisms, and a single user is the objective to create transactions in these mechanisms. In order to optimize the generic transaction priority ranking mechanisms and enrich transaction creation modes, a novel user-coalition-based transaction pricing mechanism (UCTPM) is proposed, and the user coalition quality score, user coalition contribution degree, and the transaction type demand degree are formulated and introduced into the UCTPM mechanism. Our research findings indicate that the UCTPM mechanism satisfies the economic attributes of budget balanced, individual rationality, and incentive compatibility when the user coalition contribution degree increases through theoretical proof and experimental analysis. Moreover, the UCTPM mechanism allows all the transactions to be processed more efficiently by experimental analysis.
... With the miners focusing on their financial interest, the sojourn time of lower-paying transactions will inevitably increase as well [8]. Additionally, as the network grows, the fees enforced by miners are likely to increase significantly [19], further disadvantaging poorer nodes within a network. ...
The proliferation of the IoT in connected society is rapidly expanding into vertical industry sectors due to the ever-increasing ties amongst businesses and economies. As the number of IoT nodes utilized in a network increases, decentralized network infrastructure, and security provisioning mechanisms, primarily enabled by blockchain-based technologies, become more beneficial. However, blockchain-based IoT networks experience transaction throughput degradation due to the platform's cryptographically-based security features, where negotiating with ledger maintainers for faster processing is a must. Existing transaction processing schemes are mainly geared towards digital currency applications. In overcoming these challenges, a novel feeless transaction processing algorithm is proposed for non-cryptocurrency blockchain-based IoT networks. The proposed algorithm enables ledger maintainers in achieving desired processing throughputs for select transactions found in a miner's transaction pool. A utility function is designed to select transactions from miners' transaction pools to form blocks that add a desired operational value for achieving pre-determined production outputs over blockchain-based networks. Furthermore, the proposed scheme will utilize an aging process to increase the likelihood of selecting transactions with larger miners' transaction pool residence times. The simulation and implementation results show that the proposed methodologies increase the processing throughput of desired transactions while preventing transaction processing starvation.
... However, it is possible that the attached fees would reach or even exceed the trading bitcoins, especially in micro-payment scenarios. With this in mind, the exorbitant transaction fees resulting from the GFP mechanism will render the system uneconomical for micro payments [3], [12]. Furthermore, the GFP mechanism has been proved to be unstable in many scenarios, due to the dynamic environment, which may force inefficient investments in gaming [8]. ...
Bitcoin is the first and most successful Blockchain system so far. In the Bitcoin system, miners use transaction attached fees as a driving force to mine a new block and package transactions, while users compete by bidding transaction fees for faster confirmation. Considering the particularity of Bitcoin trading system, we take time series into consideration to analyze the transaction rules of Bitcoin system from the perspective of multiple cycles and establish a dynamic game model related to time under Generalised Second Price(GSP) mechanism, and also confirm the model’s superiority on saving users’ fees, compared with the static game model. Also,we propose the quantification of the user experience quantified by calculating the price difference between the transactions uploaded by the same user within adjacent times, making the transaction process of the Bitcoin system no longer the final say of the transaction price. The dynamic game model shows that there is a perfect Bayesian game equilibrium solution in the payment decision, so there is no incentive for users to change the attached fee, and the whole system is maintained stably. In addition, we verify the dynamic game model from computational experiment. Firstly, it is proved that with the help of revenue discount, the cost saving of the dynamic model is generally higher than that of the static model. Then the user’s revenue under the dynamic model is showing an upward trend, and the transactions order under the dynamic model is more stable than that under static model, which can be illustrated mathematically and computationally that the proposed dynamic game model in this paper will help all transactions be processed more efficiently in a uniform pipeline.
