Optimizing Cryptocurrencies for Profit

Abstract

There is a considerable body of research exploring the dynamics of the mining process for Bitcoin, the mining ecosystem, and the inherent risks of concentrating network computing power in the hands of just a few miners. Our research is not about hash riddle portion of block mining in which miners compete with one another to find a block which is hard by design. Instead our work focuses on finding candidate blocks which will be mined and will contribute to the miner’s profit. Our work, we believe, is the first to optimize the mining process by giving miners the facility to fine-tune the trade-off between block size and miner profit. The problem we are trying to solve is similar to the knapsack problem. In knapsack problem we have a given set of values and weights for particular items, among which we have to select items to maximize the value but the weight should not exceed its knapsack limit. Here items are transactions having transaction fees as its value and transaction size as its weight and considering knapsack limit as 1MB block, which will contain these transactions.