How Does Competition among Miners Influence Their Transaction Selection Strategy?
Competition among miners forces them to adopt the most profit-maximizing transaction selection strategy. If a miner were to include low-fee transactions while others included high-fee ones, the non-profit-maximizing miner would earn less revenue per block.
Over time, this lower profitability would force them out of business. Therefore, competition ensures that all rational miners are incentivized to select the highest fee-per-byte transactions, creating a uniform, highly efficient fee market and a consistent selection strategy across the network.
Glossar
Rational Miners
Miner ⎊ The term "Rational Miners," within cryptocurrency derivatives, options trading, and financial derivatives, denotes a specific class of participants exhibiting behavior predicated on consistent, model-driven decision-making, rather than sentiment or speculative impulses.
Miners
Validation ⎊ The term "Miners," within cryptocurrency contexts, fundamentally denotes entities responsible for validating and adding new transaction records to a blockchain.
Transaction Selection
Criterion ⎊ Transaction selection is the critical process where a block producer, such as a miner or validator, chooses a subset of pending transactions from the mempool to include in the next canonical block.
Competition
Market ⎊ Competition in the cryptocurrency and derivatives markets refers to the rivalry among exchanges, protocols, and market makers for liquidity, trading volume, and user base.