Beyond Bitcoin by Hanna Halaburda & Miklos Sarvary & Guillaume Haeringer

Author:Hanna Halaburda & Miklos Sarvary & Guillaume Haeringer
Language: eng
Format: epub
ISBN: 9783030889319
Publisher: Springer International Publishing

2The hexadecimal system uses base of 16 for number notation, similarly to the decimal system using the base of 10. That means that each digit may represent any number between 0 and 15. Since we do not have commonly accepted digits for 10, 11, …, 15, the hexadecimal system may use, for example, a, b, …, f for that.

3There exist different hashing algorithms. The one we used here is called SHA-256, which is the same as Bitcoin’s.

4See Huberman et al. (2021).

5This condition is called by economists a “zero profit condition” and is a standard tool in economics to analyze market entry and exit. It refers to the economic profit, which is equal to the accounting profit (revenue minus cost) minus the opportunity cost. A miner’s opportunity cost for mining is simply the revenue the miner would get if he were not mining. Hence, miners will enter the mining game as long as their accounting profit is at least as high as their opportunity cost, i.e., as long as their economic is positive. See Prat and Walter (2021).

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