Incentivizing Honest Mining in Blockchain Networks: A Reputation Approach

Abstract

The core security of proof-of-work (PoW)-based blockchain networks, relies on PoW consensus algorithm and requires miners solving a crypto-puzzles of hash computation. However, the mining process in the blockchain is resource-intensive where only the first miner who completes full PoW will be rewarded. Therefore, miners exhibit malicious behaviors which cause a waste of distributed computation resource, even posing a threat on the efficiency of blockchain networks. In this brief, we propose a new reputation-based mechanism for the PoW computation in the blockchain, in which miners are incentivized to conduct honest mining. Based on the game theory, we design a reputation-based algorithm to encourage honest mining of miners, and thereby increase the overall revenue of the pool. In addition, numerical illustrations are also presented to support the performance of our proposed mechanism.