Rational Mining Of Bitcoin

Abstract

Bitcoin is a decentralized cryptocurrency. It is secure as long as majority of the computational resources are with honest miners who follow the Bitcoin protocol. There has been several attacks on Bitcoin mining process in recent years. Selfish mining has been proposed by which miners can get more reward than their fair share. If 33% of the miners are follow the selfish mining strategy, then the Bitcoin system will no longer remain decentralized. We propose a new mining strategy called the Rational Mining, following which only 28% of miners are enough to make Bitcoin decentralized.We analyze the different strategies and show how a miner can choose a strategy to maximize its gain under different parameter selection.