Incentive Mechanism for Throughput Enhancement in Blockchain-based Energy Trading System

In a blockchain-based energy trading system, prosumers engage in energy trading and simultaneously participate in blockchain mining to process trading transactions. However, as blockchain mining consumes energy, prosumers may lack incentives to participate, resulting in a low blockchain throughput and negatively affecting the energy trading market. To address this issue, we propose a Two-Piece Linear Compensation (TPLC) mechanism to incentivize sufficient participation for blockchain mining. We model the mechanism design as a two-stage game, wherein the system designer proposes the mechanism in Stage I, and prosumers decide on their energy allocation strategies in Stage II. We analyze the complex and coupled interactions of prosumers and uncover the reason for the low throughput issue: a self-interested prosumer neglects the positive externality of energy allocation to the blockchain, as it does not benefit him. Despite the diverse objectives of prosumers and the large search space of the mechanism, we demonstrate that the distributed TPLC mechanism achieves the maximum social welfare of a centralized decision benchmark. The numerical analysis compares the TPLC mechanism with linear compensation and no compensation benchmarks. Our results show that the TPLC mechanism achieves the highest social welfare and average payoff for prosumers. Additionally, the TPLC mechanism supports a large energy market without sacrificing the user experience. © 2023 IEEE.