Auction Mechanisms in Cloud/Fog Computing Resource Allocation for Public Blockchain Networks (1804.09961v3)

Abstract: As an emerging decentralized secure data management platform, blockchain has gained much popularity recently. To maintain a canonical state of blockchain data record, proof-of-work based consensus protocols provide the nodes, referred to as miners, in the network with incentives for confirming new block of transactions through a process of "block mining" by solving a cryptographic puzzle. Under the circumstance of limited local computing resources, e.g., mobile devices, it is natural for rational miners, i.e., consensus nodes, to offload computational tasks for proof of work to the cloud/fog computing servers. Therefore, we focus on the trading between the cloud/fog computing service provider and miners, and propose an auction-based market model for efficient computing resource allocation. In particular, we consider a proof-of-work based blockchain network. Due to the competition among miners in the blockchain network, the allocative externalities are particularly taken into account when designing the auction mechanisms. Specifically, we consider two bidding schemes: the constant-demand scheme where each miner bids for a fixed quantity of resources, and the multi-demand scheme where the miners can submit their preferable demands and bids. For the constant-demand bidding scheme, we propose an auction mechanism that achieves optimal social welfare. In the multi-demand bidding scheme, the social welfare maximization problem is NP-hard. Therefore, we design an approximate algorithm which guarantees the truthfulness, individual rationality and computational efficiency. Through extensive simulations, we show that our proposed auction mechanisms with the two bidding schemes can efficiently maximize the social welfare of the blockchain network and provide effective strategies for the cloud/fog computing service provider.

• The paper introduces a constant-demand auction scheme that optimally allocates fixed computational resources among miners to maximize social welfare.
• It proposes a multi-demand auction using an approximate algorithm to ensure truthfulness and rationality despite the NP-hard allocation challenge.
• Experimental validation demonstrates that these mechanisms enhance blockchain network resilience and support decentralized consensus for lightweight devices.

Auction Mechanisms in Cloud/Fog Computing Resource Allocation for Public Blockchain Networks

This paper presents a detailed exploration of auction-based mechanisms for allocating cloud and fog computing resources specifically within the domain of public blockchain networks. The authors, Yutao Jiao, Ping Wang, Dusit Niyato, and Kongrath Suankaewmanee, dive into the intricacies of how these mechanisms can be designed to optimize resource allocation while considering the unique constraints and requirements of blockchain technology, particularly under the proof-of-work (PoW) consensus model.

Technical Overview

Blockchain technology has established itself as a reliable decentralized platform for secure data management and has been widely adopted in applications such as cryptocurrencies, IoT, and various decentralized data management applications. The network's integrity is maintained by consensus protocols such as PoW, which requires nodes, or miners, to solve computational puzzles as part of the block verification process. However, not all miners possess ample local computational resources to perform these tasks efficiently, leading them to offload these computations to cloud or fog servers.

Recognizing this need, the authors propose a market model based on auction mechanisms for resource trading between miners and service providers. This model is designed to address the allocative inefficiencies and externalities that arise due to the competitive requirements of blockchain mining.

Proposed Auction Mechanisms

The paper outlines two distinct auction schemes: the constant-demand scheme and the multi-demand scheme. Both schemes aim to optimize social welfare, which is defined as the system's efficiency in terms of both miners' valuations and the service provider’s operational costs.

1. Constant-Demand Scheme: Here, each miner bids for a fixed quantity of computational resources. The authors propose an auction mechanism that has been shown to achieve optimal social welfare within this setup, ensuring that the resources are allocated efficiently among the miners.
2. Multi-Demand Scheme: In this more complex setup, miners can express varying demands for resources. The associated social welfare maximization problem is classified as NP-hard, given its equivalence to a non-monotone submodular function maximization with knapsack constraints. The paper introduces an approximate algorithm that guarantees truthfulness, rationality, and computational efficiency.

Implications and Future Directions

The paper's contributions address critical considerations in the deployment and maintenance of public blockchain networks. By providing robust mechanisms for resource allocation, it facilitates decentralized consensus processes even when computational resources are externally sourced. This has the potential to significantly bolster the resilience and accessibility of blockchain infrastructures, making them viable for a broader range of applications including those involving lightweight devices like mobile and IoT systems.

Moreover, by using real-world experiments to validate the proposed hash power and network effects functions, the research connects theoretical auction design with practical performance, providing insights for efficiently implementing and operating such systems.

For future research, the paper suggests exploring extensions of these mechanisms to accommodate different types of consensus protocols or computational paradigms. Further investigation could also address the dynamic nature of market conditions or integrate more sophisticated models of miner behavior and network security demands.

In conclusion, this work provides a comprehensive framework for understanding and implementing auction-based resource allocation within cloud/fog computing environments that support blockchain networks, contributing valuable insights into the optimization of distributed ledger technologies.