Decentralized Mining in Centralized Pools

• 成果类型: Article
• 署名作者: Cong, Lin William; He, Zhiguo; Li, Jiasun
• 署名单位: Cornell University; University of Chicago; National Bureau of Economic Research; George Mason University
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhaa040
• 发表日期: 2021
• 页码: 1191
• 关键词: energy-consumption; Blockchain

摘要

The rise of centralized mining pools for risk sharing does not necessarily undermine the decentralization required for blockchains: because of miners' cross-pool diversification and pool managers' endogenous fee setting, larger pools better internalize their externality on global hash rates, charge higher fees, attract disproportionately fewer miners, and grow more slowly. Instead, mining pools as a financial innovation escalate miners' arms race and significantly increase the energy consumption of proof-of-work-based blockchains. Empirical evidence from Bitcoin mining supports our model's predictions. The economic insights inform other consensus protocols and the industrial organization of mainstream sectors with similar characteristics but ambiguous prior findings.