A hashing power allocation game in cryptocurrencies

Abstract

Various crypto-currencies backed by Blockchain technology are now springing up like mushrooms. Miners in these peer-to-peer networks compete to maintain the validity of the underlying ledgers to earn the bootstrapped crypto-currencies. With limited hashing power, each miner needs to decide how to allocate their resource to different crypto-currencies so as to achieve the best overall payoff. Together all the miners form a hashing power allocation game. We consider the setting of the game in which the miners are risk-neutral. We show that a unique pure Nash Equilibrium exists and can be computed efficiently in this settings.