Block Mining or Service Providing: A Profit Optimizing Game of the PoW-Based Miners

Abstract

The Proof-of-Work (PoW) consensus is widely used to maintain the security and consistency of the blockchain systems. In PoW, the miners have to consume tremendous computing resources to compete for generating a valid block and win the reward. However, in recent years, the revenue of the miners face a large oscillation, due to economic policy changes, virtual currency price fluctuations, etc. Some miners have to stop mining and exit the market, leaving large number of computing resources vacant. Whereas, vast computing resources are required outside the blockchain ecosystem, such as cloud/edge computing and artificial intelligence. In this paper, the traditional miners (T-miner) which concentrate on block mining are promoted to the evolutionary miners (E-miner) with additional ability to provide computing services. We propose a scheme for the E-miners to connect the blockchain ecosystem with external computation requirements, releasing the redundant computing power of the E-miners to provide computing services for extra profits. A two-stage Stackelberg game is presented to model the interaction between the computing service pricing and each E-miner's computing power allocation. The details of the game are separately elaborated for both flexible and specified external computing requirements, in pure environment with only E-miners and hybrid environment with both E-miners and T-miners, respectively. We utilize two distributed iteration algorithms to find the equilibrium point of the Stackelberg game, where both sides can achieve optimal utility. Extensive simulation results demonstrate the effect of our proposed schemes, and show that the profits of the E-miners are considerably increased compared with the T-miners that devote all computing power to block mining.

Keywords

• Blockchain
• miner
• proof-of-work
• computing power allocation
• game