Miners’ Reward Elasticity and Stability of Competing Proof-of-Work Cryptocurrencies

Principal Investigator(s):  View help for Principal Investigator(s) Kohei Kawaguchi, Hong Kong University of Science and Technology; Junpei Komiyama, New York University; Shunya Noda, The University of Tokyo

Version:  View help for Version V1

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BlockChainReplication.zip application/zip 27.3 GB 01/16/2026 03:12:PM

Project Citation: 

Kawaguchi, Kohei, Komiyama, Junpei, and Noda, Shunya. Miners’ Reward Elasticity and Stability of Competing Proof-of-Work Cryptocurrencies. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2026-01-16. https://doi.org/10.3886/E244299V1

Project Description

Summary:  View help for Summary Proof-of-Work cryptocurrencies employ miners to sustain the system through algorith-mic reward adjustments. We develop a stochastic model of the multicurrency miningand identify conditions for stable transaction speeds. Bitcoin’s algorithm requires hashsupply elasticity ≤1 for stability, while ASERT remains stable for any elasticity andcan be interpreted as a form of stochastic gradient descent. Interactions with othercurrencies can relax Bitcoin’s stability requirements. Using a halving event, we es-timate miners’ hash supply elasticity and conduct counterfactual simulations. Ourfindings reveal Bitcoin’s heavy reliance on low hash supply elasticity and interactionswith smaller cryptocurrencies, urging an algorithm upgrade for stability.



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