The Evolution of Mining Pools and Miners' Behaviors in the Bitcoin Blockchain

• Published in: IEEE eTransactions on network and service management Vol. 19; no. 3; pp. 3633 - 3644
• Main Authors: Tovanich, Natkamon, Soulie, Nicolas, Heulot, Nicolas, Isenberg, Petra
• Format: Journal Article
• Language: English
• Published: New York IEEE 01-09-2022; The Institute of Electrical and Electronics Engineers, Inc. (IEEE)
• Subjects: Algorithms; Bitcoin; bitcoin mining; Blockchains; Computer Science; Cryptography; Cryptography and Security; Data mining; Digital currencies; Economics and Finance; Emerging Technologies; Evolution; Hardware; Humanities and Social Sciences; Image color analysis; Miners; mining pools; pool hopping; Pools; Protocols; Public policy; Uncertainty; visual analytics; Bitcoin mining; Visual analytics; Pool hopping; Bitcoin; Mining pools
• ISSN: 1932-4537; 1932-4537
• DOI: 10.1109/TNSM.2022.3159004

We analyzed 23 mining pools and explore the mobility of miners throughout Bitcoin's history. Mining pools have emerged as major players to ensure that the Bitcoin system stays secure, valid, and stable. Many questions remain open regarding how mining pools have evolved throughout Bitcoin's history and when and why miners join or leave the pools. We investigated the reward payout flow of mining pools and characterized them based on payout irregularity and structural complexity. Based on our proposed algorithm, we identified miners and studied their mobility in the pools over time. Our analysis shows that Bitcoin mining is an industry that is sensitive to external events (e.g., market price and government policy). Over time, competition between pools involving reward schemes and pool fees motivated miners to migrate between pools (i.e., pool hopping and cross pooling). These factors converged toward optimal scheme and values, which made mining activities more stable.