Rational Miner Behaviour, Protocol Stability, and Time Preference: An Austrian and Game-Theoretic Analysis of Bitcoin's Incentive Environment
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arXiv
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| Format: | Preprint |
| Published: |
2025
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| _version_ | 1866916811180605440 |
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| author | Wright, Craig Steven |
| author_facet | Wright, Craig Steven |
| contents | This paper integrates Austrian capital theory with repeated game theory to examine strategic miner behaviour under different institutional conditions in blockchain systems. It shows that when protocol rules are mutable, effective time preference rises, undermining rational long-term planning and cooperative equilibria. Using formal game-theoretic analysis and Austrian economic principles, the paper demonstrates how mutable protocols shift miner incentives from productive investment to political rent-seeking and influence games. The original Bitcoin protocol is interpreted as an institutional anchor: a fixed rule-set enabling calculability and low time preference. Drawing on the work of Bohm-Bawerk, Mises, and Hayek, the argument is made that protocol immutability is essential for restoring strategic coherence, entrepreneurial confidence, and sustainable network equilibrium. |
| format | Preprint |
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arxiv_https___arxiv_org_abs_2506_20965 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | Rational Miner Behaviour, Protocol Stability, and Time Preference: An Austrian and Game-Theoretic Analysis of Bitcoin's Incentive Environment Wright, Craig Steven General Economics Economics Cryptography and Security Computer Science and Game Theory Networking and Internet Architecture General Finance 91B42, 91A25, 91B50 K.4.4; J.4; C.2.4 This paper integrates Austrian capital theory with repeated game theory to examine strategic miner behaviour under different institutional conditions in blockchain systems. It shows that when protocol rules are mutable, effective time preference rises, undermining rational long-term planning and cooperative equilibria. Using formal game-theoretic analysis and Austrian economic principles, the paper demonstrates how mutable protocols shift miner incentives from productive investment to political rent-seeking and influence games. The original Bitcoin protocol is interpreted as an institutional anchor: a fixed rule-set enabling calculability and low time preference. Drawing on the work of Bohm-Bawerk, Mises, and Hayek, the argument is made that protocol immutability is essential for restoring strategic coherence, entrepreneurial confidence, and sustainable network equilibrium. |
| title | Rational Miner Behaviour, Protocol Stability, and Time Preference: An Austrian and Game-Theoretic Analysis of Bitcoin's Incentive Environment |
| topic | General Economics Economics Cryptography and Security Computer Science and Game Theory Networking and Internet Architecture General Finance 91B42, 91A25, 91B50 K.4.4; J.4; C.2.4 |
| url | https://arxiv.org/abs/2506.20965 |