Author: ZmnSCPxj 2020-07-03 12:38:37
Published on: 2020-07-03T12:38:37+00:00
In a recent email thread, Itay from MAD-HTLC clarified the differences between myopic and non-myopic miners in Bitcoin mining optimization. A myopic miner optimizes transaction selection for the next block with respect only to the next block, while a non-myopic miner optimizes transaction selection for the next block with respect to several future blocks. However, neither of these mean that these miners choose to act in a way that reduces their expected revenue. The term "dominates" in game theory is used to describe a strategy that always wins more points than another strategy. Myopic strategies will consistently beat non-myopic strategies because the myopic miners will impose costs on the non-myopic miners. Currently, it is estimated that probably 0% of the hash rate is non-myopic. Even though non-myopic optimizations are in miners' best interest, implementing them is pointless since they will lose revenue in an environment where even a minority of blocks are created by myopic miners. The analysis assumes Common Knowledge, all participants know all other participants, their available strategies, and utilities. To win, non-myopic miners would have to form a cartel, but a miner cartel with over 50% hashpower would be the end of Bitcoin.
Updated on: 2023-06-14T02:34:44.485361+00:00