2021/09/07 by Hansjörg Albrecher, Albrecher, Hansjoerg, Dina Finger +3
Business, Management and Accounting · Computer Science · Engineering · #Blockchain Technology Applications and Security #Cryptography and Security (cs.CR) #FOS: Computer and information sciences #FOS: Mathematics #Probability (math.PR) #Supply Chain and Inventory Management #Transportation and Mobility Innovations
paper · pdf · doi:10.48550/arxiv.2109.03085
openalex publication_date 2021/09/07 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
The resource-consuming mining of blocks on a blockchain equipped with a proof\nof work consensus protocol bears the risk of ruin, namely when the operational\ncosts for the mining exceed the received rewards. In this paper we investigate\nto what extent it is of interest to join a mining pool that reduces the\nvariance of the return of a miner for a specified cost for participation. Using\nmethodology from ruin theory and risk sharing in insurance, we quantitatively\nstudy the effects of pooling in this context and derive several explicit\nformulas for quantities of interest. The results are illustrated in numerical\nexamples for parameters of practical relevance.\n