The Impact of Profit Uncertainty on Miner Decisions in Blockchain Systems

Abstract

In blockchain systems, miners execute transactions in blocks. Since each block has a limit on the number of transactions, miners usually prioritise transactions by selecting the most profitable ones. However, miners are uncertain about the exact income and the exact cost of executing transactions. Thus, they are not able to make informed decisions of which transactions to select and execute in order to maximise their profits. The main aim of this paper is to investigate the uncertainty that miners perceive about the income and the cost of executing transactions and the impact of this uncertainty on the profit miners can gain. To achieve this aim, we design a simulation model, collect the input data for the model, implement the model and run an experiment on the model. Our simulation results show that the uncertainty miners perceive about the cost of executing transactions has a significant impact on the block profit. On the contrary, our results do not show a significant impact of the income uncertainty on the block profit.