This reminds me of another paper about proof-of-work blockchains called The Blockchain Folk Theorem [0], which has a similar conclusion (aside from the main con

This reminds me of another paper about proof-of-work blockchains called The Blockchain Folk Theorem [0], which has a similar conclusion (aside from the main conclusions): > Another issue relates to the negative externalities arising in proof-of-work blockchains. First, as shown above, when choosing individually optimal computing capacity, miners fail to internalise the negative externality their investment generates for other miners by increasing difficulty. This implies that equilibrium capacity acquisition in proof-of-work mining is excessive. Second, proof-of-work mining generates greenhouse-effect negative externalities, whose order of magnitude is significant. As of January 2018, the electricity consumed for Bitcoin mining was equal to the electricity consumption of over 3,400,000 US households, with an average consumption per transaction of around 300 KWh. Pigovian taxation could curb overinvestment in mining, but it might also be difficult to put in place, given the international decentralisation of mining. The crux of the below paper, though, is that actual game theory shows that miners are incentivized to create and persist alternative histories of the blockchain, thus jeopardizing the blockchain's key function, that is to produce a stable and immutable history of transactions. We've seen this in practice with the dozens of Bitcoin forks and with Ethereum Classic, and how unstable exchanges were during the forking process (eg. lost customer funds, double spending, replay attacks, etc.). [0] https://www.tse-fr.eu/sites/default/files/TSE/documents/doc/wp/2017/wp_tse_817.pdf https://www.tse-fr.eu/sites/default/files/TSE/documents/doc/...