Redesigning Bitcoin’s Fee Market

The Bitcoin payment system involves two agent types: users that transact with the currency and pay fees miners in charge of authorizing transactions securing return for these fees. Two Bitcoin’s challenges are (i) sufficient miner revenues as block rewards decrease, (ii) alleviating throughput limitation due to a small maximal size cap. These issues strongly related increasing may decrease revenue pay-your-bid approach. To decouple them, we analyze “monopolistic auction” [ 16 ], showing its does not increases, it is resilient an untrusted auctioneer (the miner), (iii) simplicity transaction issuers (bidders), average gain from strategic bid shading (relative bidding one’s value) diminishes number bids increases.