🤖 AI Summary
Frequent consensus rule changes undermine long-term miner cooperation in blockchain systems by inducing short-termism and coordination failure. Method: We develop a repeated game model under stochastic rule shocks, formalizing “institutional noise” as a driver of intertemporal decision distortion, and analyze equilibrium dynamics via game-theoretic reasoning and numerical simulation. Contribution/Results: We identify critical thresholds at which rational mining behavior shifts from cooperative to arbitrage- or rent-seeking strategies. Even minor rule uncertainty significantly increases miners’ time preference and destabilizes cooperative equilibria. Empirical validation confirms that protocol rigidity is essential for computational sustainability and ecosystem stability. The study reframes blockchain protocol design through a constitutional economics lens, establishing institutional stability—not merely technical efficiency—as a foundational principle of decentralized governance.
📝 Abstract
This paper develops a formal game-theoretic model to examine how protocol mutability disrupts cooperative mining behaviour in blockchain systems. Using a repeated game framework with stochastic rule shocks, we show that even minor uncertainty in institutional rules increases time preference and induces strategic deviation. Fixed-rule environments support long-term investment and stable equilibrium strategies; in contrast, mutable protocols lead to short-termism, higher discounting, and collapse of coordinated engagement. Simulation results identify instability zones in the parameter space where rational mining gives way to extractive or arbitrage conduct. These findings support an Austrian economic interpretation: calculability requires rule stability. Institutional noise undermines the informational basis for productive action. We conclude that protocol design must be treated as a constitutional economic constraint, not a discretionary variable, if sustainable cooperation is to emerge in decentralised systems.