Bitcoin: An Axiomatic Approach and an Impossibility Theorem

A-Tier
Journal: American Economic Review: Insights
Year: 2020
Volume: 2
Issue: 3
Pages: 269-86

Authors (2)

Jacob D. Leshno (not in RePEc) Philipp Strack (Yale University)

Score contribution per author:

2.011 = (α=2.01 / 2 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Bitcoin's main innovation lies in allowing a decentralized system that relies on anonymous, profit-driven miners who can freely join the system. We formalize these properties in three axioms: anonymity of miners, no incentives for miners to consolidate, and no incentive to assuming multiple fake identities. This novel axiomatic formalization allows us to characterize what other protocols are feasible: every protocol with these properties must have the same reward scheme as Bitcoin. This implies an impossibility result for risk-averse miners. Furthermore, any protocol either gives up on some degree of decentralization or its reward scheme is equivalent to Bitcoin's.

Technical Details

RePEc Handle
repec:aea:aerins:v:2:y:2020:i:3:p:269-86
Journal Field
General
Author Count
2
Added to Database
2026-01-29