Quantum Attack Game Theory

The discussion revolves around the complexities of calculating Expected Value in scenarios involving blockchain reorganization by miners. Initially, a formula from the Bitcoin Whitepaper was considered to estimate the likelihood of a miner with a specific hashrate successfully reorganizing the blockchain after a certain number of blocks. This approach was initially implemented in a developed web application, which can be accessed here. However, this formula was deemed inadequate for scenarios where multiple mining activities occur concurrently across the network.

In response to the inadequacy of the initial formula, a new tool was created to better model the scenario of fee sniping among Bitcoin miners. This second tool provides a more tailored analysis for situations where miners make an "initial decision" to mine privately, without gaining additional benefits from block subsidies if their private chain overtakes the public one. The tool further explores how the expected value adjusts as the length of the privately mined chain increases, incorporating variables such as block subsidy and rewards into the calculus. This newer modeling tool is accessible here.

These tools and analyses are critical for understanding the financial implications and strategic decisions involved in cryptocurrency mining, particularly in the context of potential gains from reorganizing the blockchain versus continuing to mine on the existing chain tip. The development and refinement of such models are essential for miners who need to make informed decisions based on the probabilistic returns of different mining strategies.