Mining Pool Game Model and Nash Equilibrium Analysis for PoW-Based Blockchain Networks

Abstract

Blockchain technology, has the characteristics of decentralization, openness and transparency, so that everyone can participate in database recording. Therefore, blockchain technology has a good application prospect in various industries. As the most successful application of blockchain technology, the Bitcoin system applies the Proof of Work (PoW) consensus mechanism. Under the PoW consensus mechanism, each miner competes through his own power to solve a SHA256 mathematical problem together, so as to gain profits. Due to the difficulty of the cryptography puzzle, miners tend to join the mining pool to obtain stable income. And the block withholding attacks will be carried out between the mining pools, so as to maximize his own income by controlling the infiltration rate dispatched to other mining pools. In this paper, we build a game model between mining pools based on the PoW consensus algorithm, and analyze its Nash equilibrium from two perspectives. The influence of the mining pools' power, the ratio of the power to be infiltrated, and the betrayed rate of dispatched miners on the mining pool's infiltration rate selection and income were explored, and the results were obtained through numerical simulations.