Bitcoin: An Impossibility Theorem for Proof-of-Work based Protocols

11 Pages Posted: 10 Oct 2019

See all articles by Jacob Leshno

Jacob Leshno

Chicago Booth

Philipp Strack

Yale, Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: February 11, 2019


A key part of decentralized consensus protocols is a procedure for random selection, which is the source of the majority of miners cost and wasteful energy consumption in Bitcoin. We provide a simple economic model for random selection mechanism and show that any PoW protocol with natural desirable properties is outcome equivalent to the random selection mechanism used in Bitcoin.

Keywords: Bitcoin, Random Selection, Proportional Selection Rule, Impossibility Theorem

JEL Classification: C72, D02, D47

Suggested Citation

Leshno, Jacob and Strack, Philipp, Bitcoin: An Impossibility Theorem for Proof-of-Work based Protocols (February 11, 2019). Cowles Foundation Discussion Paper No. 2204, February 2019, Available at SSRN: or

Jacob Leshno

Chicago Booth ( email )

5807 S. Woodlawn Ave
Chicago, IL 60610
United States

Philipp Strack (Contact Author)

Yale, Department of Economics ( email )

28 Hillhouse Ave
New Haven, CT 06520-8268
United States

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