Strategic Users in a Priority Queue with Bulk Service on Blockchains
This paper models transaction fee dynamics on blockchains by treating the transaction queue as a priority queue, providing analytical insights into how user delay costs influence fees.
Abstract
More Like ThisThis paper analyzes transaction fees on blockchains by considering that they form a priority queue and users play a queueing game. Using an M/G^K/1 priority queue model, we provide new insights into the dynamics governing transaction fees and their impact on user behavior. We derive semi-closed form expressions for steady-state quantities and extend the relationship between user delay costs and transaction fees to general block generation times. We apply the model to the Bitcoin network and simulate user responses under various scenarios. Cross-chain analysis across Bitcoin, Dogecoin, and Litecoin reveals similarities in normalized cost structures.