Stabilizing Congestion in Decentralized Record-Keepers
This addresses cost efficiency, scalability, and adaptability problems for decentralized payment systems, though it appears incremental.
The paper tackles economic drawbacks in decentralized record-keeping systems by proposing a protocol that autonomously adjusts throughput based on system difficulty, resulting in stable transaction fees and wait-times with zero block rewards.
We argue that recent developments in proof-of-work consensus mechanisms can be used in accordance with advancements in formal verification techniques to build a distributed payment protocol that addresses important economic drawbacks from cost efficiency, scalability and adaptablity common to current decentralized record-keeping systems. We enable the protocol to autonomously adjust system throughput according to a feasibly computable statistic - system difficulty. We then provide a formal economic analysis of a decentralized market place for record-keeping that is consistent with our protocol design and show that, when block rewards are zero, the system admits stable, self-regulating levels of transaction fees and wait-times across varying levels of demand. We also provide an analysis of the various technological requirements needed to instantiate such a system in a commercially viable setting, and identify relevant research directions.