A novel GSP auction mechanism for ranking Bitcoin transactions in blockchain mining

摘要

Bitcoin is gaining ground in recent years. In the Bitcoin system, miners provide computing power to confirm transactions and mine blocks in pursuit of transaction fees, while users compete by bidding transaction fees for faster confirmation. This process is in essence analogous to online ad auctions, where advertisers bid for more prominent ad slots. Therefore, inspired by the Generalized Second Price (GSP) mechanism dominantly used in online ad auctions, we propose to adopt the GSP auction model in the Bitcoin transaction confirmation game. Also, we use weighted fees as the new ranking basis, which can be calculated by user-submitted fees, transaction size, quality scores and virtual fees accumulated from the waiting time. We show that the formulated static GSP transaction fee auction with complete information has a unique Pure Strategy Nash Equilibrium. Then, we discuss the impacts of quality scores and virtual fees on users' equilibrium fee decisions and payoffs. Finally, computational experiments are designed to validate our theoretical models and analysis. Our research findings indicate that this novel GSP mechanism is superior to the currently adopted GFP mechanism, and can help users save fees. Besides, quality scores and virtual fees are also proven to be effective on reducing users' paid fees. Moreover, the design of virtual fees allows all transactions to be processed more efficiently in a uniform pipeline, and the interests of transactions with and without associated fees are taken into consideration.