Entries for 2019
Blockchain Fee Volatility
Ethereum is a platform for distributed computing that uses a blockchain for data storage, thus inheriting the many benefits blockchain systems enjoy, such as decentralization and permissionlessness. It also inherited the idea of users paying nodes a fee to get their transactions included in the blockchain. After all, computation on the blockchain is not an infinite resource, and it should be allocated to users who actually find value in it. Otherwise, a feeless blockchain can easily be spammed and indefinitely suffer a denial-of-service attack.
Equilibrium in Cryptoeconomic Networks
A cryptoeconomic network is a network where
Scalable Reward Distribution with Changing Stake Sizes
This post is an addendum to the excellent paper Scalable Reward Distribution on the Ethereum Blockchain by Batog et al.1 The outlined algorithm describes a pull-based approach to distributing rewards proportionally in a staking pool. In other words, instead of pushing rewards to each stakeholder in a for-loop with $O(n)$ complexity, a mathematical trick enables keeping account of the rewards with $O(1)$ complexity and distributing only when the stakeholders decide to pull them. This allows the distribution of things like rewards, dividends, Universal Basic Income, etc. with minimal resources and huge scalability.
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Batog B., Boca L., Johnson N., Scalable Reward Distribution on the Ethereum Blockchain, 2018. ↩
Bitcoin's Inflation
New bitcoins are minted with every new block in the Bitcoin blockchain, called “block rewards”, in order to incentivize people to mine and increase the security of the network. This inflates Bitcoin’s supply in a predictable manner. The inflation rate halves every 4 years, decreasing geometrically.