Analyzing and Modeling Connection Impact on Distributed Consensus in Cryptocurrency Blockchain
Sang‐Yoon Chang, Nazmus Sakib, Simeon Wuthier, Keith Paarporn · 2025
Blockchain systems and cryptocurrencies rely on the peer-to-peer (P2P) networking to deliver and broadcast the latest blocks and transactions. Such networking is critical, because the delivered information enable the distributed consensus protocol and have direct impacts on the miner's rewards and incomes in the proof-of-work (PoW) cryptocurrencies such as Bitcoin. We study the interplay between the P2P networking and the PoW distributed consensus protocol by controlling the number of P2P connections and analyzing its impacts on the miner's rewards and costs. While the mining reward increases as the connection increases, which is known in the Bitcoin community, the optimal control for maximizing the income (reward minus cost) is bounded and finite in practice due to the networking and mining costs. In this paper, we theoretically model the utility and miner's net-income of the consensus protocol, capturing their dependence on the P2P connectivity control. We apply the model to analyze the optimal control of our active Bitcoin prototypes connected to the Mainnet to demonstrate the model's usefulness. To facilitate and encourage further use of our model and the R&D in cryptocurrency networking in general, we discuss about the model applications and future directions.