The Fallacy of the Selfish Miner in Bitcoin: An Economic Critique
6 Pages Posted: 29 Apr 2018
Date Written: March 28, 2017
Contrary to Eyal and Sirer’s (2013) claim, the Selfish Mine strategy poses no threat to the bitcoin protocol. In this first in a series of papers we demonstrate that this strategy leads to lower profits compared to honest mining and therefore there is no incentive for rational miners to adopt it. In this paper, we clarify a common misconception about the bitcoin mining protocol that misleads people into thinking that hiding solved blocks can be advantageous. To the contrary, hiding solved blocks only puts them at risk for no gain: the selfish miner can never earn more blocks than they would already be entitled to when using the honest strategy.
Keywords: Bitcoin Selfish Mining
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