Abstract
Blockchain technology has garnered significant attention from academia and industry over the past decade. Originally developed as a decentralized, tamper-proof transaction ledger for cryptocurrencies, blockchain now finds applications across diverse fields such as IoT, healthcare, and insurance. This survey bridges the gap between extensive blockchain research utilizing game theory as an analytical tool and the absence of a comprehensive review on game-theoretical approaches to blockchain-related issues.
We examine game models addressing key blockchain challenges, including:
- Security issues: Selfish mining, majority attacks, and Denial-of-Service (DoS) attacks
- Mining management: Computational power allocation, reward distribution, and pool selection
- Blockchain applications: Energy trading and economic systems
Additionally, we evaluate the strengths and weaknesses of selected game models and solutions, concluding with important challenges and future research directions for game theory in blockchain incentive mechanism design and technology integration.
Index Terms
Blockchain, game theory, security, mining management
I. Introduction
Since Bitcoin's emergence [[1]], blockchain technology has revolutionized decentralized systems [[2]]. Platforms like Ethereum [[3]], Ripple [[4]], and EOS [[5]] demonstrate blockchain's versatility beyond cryptocurrencies, extending to IoT [[6]], healthcare [[7]], and insurance [[8]].
Blockchain operates as a distributed public ledger maintained via consensus in P2P networks. Transactions are verified and stored in an append-only chain of blocks, creating a transparent, trustless system resistant to tampering. This process involves:
- Transaction verification
- Block dissemination
- Chain extension
Consensus Protocols
Blockchain networks rely on consensus protocols like:
- Byzantine Fault Tolerance (BFT) [[9]]: Suitable for permissioned blockchains
- Proof of Work (PoW) [[1]]: Used in public blockchains
- Proof of Stake (PoS) [[31]]: An energy-efficient alternative
Rational nodes aim to maximize utility, while malicious nodes may attack the network. Game theory [[11]] provides an ideal framework to analyze these interactions, offering:
- Strategic interaction analysis among rational decision-makers [[12]]
- Incentive mechanism design
- Equilibrium analysis for optimal strategies
👉 Explore blockchain consensus mechanisms in depth
II. Blockchain Fundamentals
A. Key Advantages
- Decentralization: Eliminates centralized control
- Tamper-proof ledger: Cryptographic security ensures data integrity
- Transparency: All transactions are verifiable
- Trustless security: Secure trading without intermediaries
B. Data Structure
Blockchain organizes data through:
- Transactions: Basic units containing sender/receiver info and value
- Blocks: Containers for transactions with headers linking to previous blocks
- Hash pointers: Cryptographic links forming the chain
- Merkle trees: Efficient data verification structures
C. Workflow
- Transaction initiation and broadcast
- Network verification
- Block creation and propagation
- Consensus validation
- Chain update
III. Game Theory Fundamentals
Game theory models strategic interactions among rational players. Key concepts include:
A. Non-cooperative Games
Players compete without cooperation. Nash equilibrium occurs when no player benefits from unilaterally changing strategy [[12]].
Applications:
- Computational power allocation [[29]]
- Fork chain selection [[33]]
B. Extensive-form Games
Model sequential decisions using game trees. Subgame perfect equilibrium ensures optimal strategies at every decision point.
Applications:
- Market entry decisions [[36]]
- Transaction selection [[37]]
C. Stackelberg Games
Leader-follower dynamics where leaders move first. Used for:
- Transaction fee setting [[43]]
- Cyber-insurance pricing [[44]]
D. Stochastic Games
Multi-state games with probabilistic transitions. Applied to:
- Mining power investment [[48]]
- Chain selection [[49]]
👉 Learn more about game theory applications
IV. Security Applications
A. Selfish Mining Attacks
Malicious miners withhold blocks to gain advantage. Game models help analyze:
- Pool block withholding attacks [[35]]
- Computational power splitting strategies [[55]]
B. Majority Attacks
When miners control >50% network power, they can:
- Reverse transactions
- Double-spend coins
Game theory examines prevention mechanisms [[60]].
C. DoS Attacks
Game models optimize defense strategies against resource-exhaustion attacks [[65]].
V. Mining Management
Game theory optimizes:
- Power allocation [[29]]
- Reward distribution [[38]]
- Pool selection [[30]]
VI. Future Directions
Key research challenges include:
- Improved incentive mechanisms
- Blockchain integration with emerging technologies
- Scalability solutions
FAQs
Q1: How does game theory improve blockchain security?
A1: By modeling attacker-defender interactions and designing incentive-compatible systems.
Q2: What's the difference between PoW and PoS?
A2: PoW relies on computational work, while PoS uses stake ownership for consensus.
Q3: Can game theory prevent 51% attacks?
A3: Yes, through mechanisms that make attacks economically irrational.
Q4: How do stochastic games apply to blockchain?
A4: They model multi-state scenarios like chain selection and power allocation.
Q5: What are the limitations of game-theoretic blockchain models?
A5: They often assume perfect rationality and may not capture all real-world complexities.
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