[Paper Review] A Survey on Applications of Game Theory in Blockchain

Ziyao Liu, Nguyen Cong Luong+5 more|arXiv (Cornell University)|Feb 28, 2019

Blockchain Technology Applications and Security117 references68 citations

TL;DR

A survey of how game theory analyzes blockchain networks, focusing on security, mining management, and economy-wide applications with various game models.

ABSTRACT

In the past decades, the blockchain technology has attracted tremendous attention from both academia and industry. The popularity of blockchain networks was originated from a crypto-currency to serve as a decentralized and tamperproof transaction data ledger. Nowadays, blockchain as the key framework in the decentralized public data-ledger, has been applied to a wide range of scenarios far beyond crypto-currencies, such as Internet of Things (IoT), healthcare, and insurance. This survey aims to fill the gap between the large number of studies on blockchain network, where game theory emerges as an analytical tool, and the lack of a comprehensive survey on the game theoretical approaches applied in blockchain related issues. In this paper, we review game models proposed to address common issues in the blockchain network. The issues include security issues, e.g., selfish mining, majority attack and Denial of Service (DoS) attack, issues regard mining management, e.g., computational power allocation, reward allocation, and pool selection, as well as issues regarding blockchain economic and energy trading. Additionally, we discuss advantages and disadvantages of these selected game models and solutions. Finally, we highlight important challenges and future research directions of applying game theoretical approaches to incentive mechanism design, and the combination of blockchain with other technologies.

Motivation & Objective

• Clarify how game theory can analyze strategic interactions among blockchain nodes (miners, pools, users).
• Review game-theoretic models addressing security threats (e.g., selfish mining, DoS) in blockchain networks.
• Survey mining-management problems (computational power allocation, pool selection, reward distribution).
• Explore incentive mechanisms and applications atop blockchain platforms, including energy trading and market interactions.

Proposed method

• Classify literature by blockchain issue categories (security, mining management, applications).
• For each work, identify the game model, players, actions, strategies, and payoffs.
• Explain standard game-theoretic concepts used (Nash equilibrium, subgame perfect equilibrium, Stackelberg, extensive-form, stochastic games).
• Summarize how each model analyzes but also what it reveals about incentive compatibility and network security.

Experimental results

Research questions

• RQ1 What game-theoretic models best capture strategic interactions among blockchain miners, pools, and users?
• RQ2 How do these models address security threats such as selfish mining, block withholding, and DoS in PoW/PoS systems?
• RQ3 What do game-theoretic analyses imply about incentive compatibility and stability of consensus protocols?
• RQ4 What are the key open challenges and future directions for combining blockchain with game theory?
• RQ5 How can game theory inform incentive design and resource allocation in blockchain-based applications (e.g., edge computing, energy trading)?

Key findings

• Game theory provides a natural framework to analyze miner and pool behavior and incentive compatibility in blockchain networks.
• Non-cooperative, extensive-form, Stackelberg, stochastic, and other game models help study security attacks, mining management, and market interactions.
• Applications include modeling selfish mining, pool block withholding, fork chain selection, reward and power allocation, and cyber-insurance pricing.
• ZD (zero-determinant) strategies and cooperation concepts are explored to improve social welfare in selfish mining contexts.
• The survey identifies challenges and outlines future directions for incentive mechanism design and integration of blockchain with other technologies.