A Holistic Approach for Bitcoin Confirmation Times & Optimal Fee Selection

arXiv:2402.17474v1 Announce Type: cross
Abstract: Bitcoin is currently subject to a significant pay-for-speed trade-off. This is caused by lengthy and highly variable transaction confirmation times, especially during times of congestion. Users can reduce their transaction confirmation times by increasing their transaction fee. In this paper, based on the inner workings of Bitcoin, we propose a model-based approach (based on the Cram\'er-Lundberg model) that can be used to determine the optimal fee, via, for example, the mean or quantiles, and models …

arxiv bitcoin can cs.cr fee holistic approach math.pr pay speed trade transaction variable