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On Bitcoin and red balloons

On Bitcoin and red balloons On Bitcoin and Red Balloons MOSHE BABAIOFF Microsoft Research, Silicon Valley and SHAHAR DOBZINSKI Department of Computer Science, Cornell University and SIGAL OREN Department of Computer Science, Cornell University and AVIV ZOHAR Microsoft Research, Silicon Valley In this letter we present a brief report of our recent research on information distribution mechanisms in networks [Babaio € et al. 2011]. We study scenarios in which all nodes that become aware of the information compete for the same prize, and thus have an incentive not to propagate information. Examples of such scenarios include the 2009 DARPA Network Challenge ( nding red balloons), and ra „es. We give special attention to one application domain, namely Bitcoin, a decentralized electronic currency system. We propose reward schemes that will remedy an incentives problem in Bitcoin in a Sybil-proof manner, with little payment overhead. Categories and Subject Descriptors: J.4 [Social and Behavioral Sciences]: Economics General Terms: Algorithms, Economics, Theory Additional Key Words and Phrases: Bitcoin, Information Propagation, Mechanism Design 1. INTRODUCTION In 2009, DARPA announced the DARPA Network Challenge, in which participants competed to nd ten red weather balloons that were placed at various locations across the United States [DARPA 2009]. Faced with the http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png ACM SIGecom Exchanges Association for Computing Machinery

On Bitcoin and red balloons

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Publisher
Association for Computing Machinery
Copyright
Copyright © 2011 by ACM Inc.
ISSN
1551-9031
DOI
10.1145/2325702.2325704
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Abstract

On Bitcoin and Red Balloons MOSHE BABAIOFF Microsoft Research, Silicon Valley and SHAHAR DOBZINSKI Department of Computer Science, Cornell University and SIGAL OREN Department of Computer Science, Cornell University and AVIV ZOHAR Microsoft Research, Silicon Valley In this letter we present a brief report of our recent research on information distribution mechanisms in networks [Babaio € et al. 2011]. We study scenarios in which all nodes that become aware of the information compete for the same prize, and thus have an incentive not to propagate information. Examples of such scenarios include the 2009 DARPA Network Challenge ( nding red balloons), and ra „es. We give special attention to one application domain, namely Bitcoin, a decentralized electronic currency system. We propose reward schemes that will remedy an incentives problem in Bitcoin in a Sybil-proof manner, with little payment overhead. Categories and Subject Descriptors: J.4 [Social and Behavioral Sciences]: Economics General Terms: Algorithms, Economics, Theory Additional Key Words and Phrases: Bitcoin, Information Propagation, Mechanism Design 1. INTRODUCTION In 2009, DARPA announced the DARPA Network Challenge, in which participants competed to nd ten red weather balloons that were placed at various locations across the United States [DARPA 2009]. Faced with the

Journal

ACM SIGecom Exchanges – Association for Computing Machinery

Published: Dec 1, 2011

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