Formalizing cost fairness for two-party exchange protocols using game theory and applications to blockchain
Formalizing cost fairness for two-party exchange protocols using game theory and applications to blockchain
Existing fair exchange protocols usually neglect consideration of cost when assessing their fairness. However, in an environment with non-negligible transaction cost, e.g., public blockchains, high or unexpected transaction cost might be an obstacle for wide-spread adoption of fair exchange protocols in business applications. For example, as of 2021-12-17, the initialization of the FairSwap protocol on the Ethereum blockchain requires the selling party to pay a fee of approx. 349.20 USD per exchange. We address this issue by defining cost fairness, which can be used to assess two-party exchange protocols including implied transaction cost. We show that in an environment with non-negligible transaction cost where one party has to initialize the exchange protocol and the other party can leave the exchange at any time cost fairness cannot be achieved.
5
Lohr, Matthias
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Skiba, Kenneth
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Konersmann, Marco
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Jürjens, Jan
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Staab, Steffen
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Lohr, Matthias
49843a98-30d6-4b5b-99d5-dcc655ecc7d4
Skiba, Kenneth
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Konersmann, Marco
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Jürjens, Jan
725dbc83-3fd3-4831-8dc1-8b7c7f93ce8a
Staab, Steffen
bf48d51b-bd11-4d58-8e1c-4e6e03b30c49
Lohr, Matthias, Skiba, Kenneth, Konersmann, Marco, Jürjens, Jan and Staab, Steffen
(2022)
Formalizing cost fairness for two-party exchange protocols using game theory and applications to blockchain.
5th IEEE International Conference on Blockchain and Cryptocurrency, , Shanghai, China.
02 - 05 May 2022.
.
(In Press)
Record type:
Conference or Workshop Item
(Paper)
Abstract
Existing fair exchange protocols usually neglect consideration of cost when assessing their fairness. However, in an environment with non-negligible transaction cost, e.g., public blockchains, high or unexpected transaction cost might be an obstacle for wide-spread adoption of fair exchange protocols in business applications. For example, as of 2021-12-17, the initialization of the FairSwap protocol on the Ethereum blockchain requires the selling party to pay a fee of approx. 349.20 USD per exchange. We address this issue by defining cost fairness, which can be used to assess two-party exchange protocols including implied transaction cost. We show that in an environment with non-negligible transaction cost where one party has to initialize the exchange protocol and the other party can leave the exchange at any time cost fairness cannot be achieved.
Text
2022043965
- Accepted Manuscript
More information
Accepted/In Press date: 15 March 2022
Venue - Dates:
5th IEEE International Conference on Blockchain and Cryptocurrency, , Shanghai, China, 2022-05-02 - 2022-05-05
Identifiers
Local EPrints ID: 456005
URI: http://eprints.soton.ac.uk/id/eprint/456005
PURE UUID: 39aaa78c-82c0-4998-a01a-696b76dda9a1
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Date deposited: 12 Apr 2022 16:31
Last modified: 17 Mar 2024 03:38
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Contributors
Author:
Matthias Lohr
Author:
Kenneth Skiba
Author:
Marco Konersmann
Author:
Jan Jürjens
Author:
Steffen Staab
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