We study the design of self-enforcing mechanisms that rely on neither a trusted third party (e.g., court, trusted mechanism designer) nor a long-term relationship. Instead, we use a smart contract written on blockchains as a commitment device. We design the digital court, a smart contract that...

The design of the Bitcoin difficulty adjustment algorithm (DAA) is vulnerable as it dismisses miners' responses to policy changes. We develop an economic model of the Proof-of-Work blockchain system. Our model allows miners to pause operation when it is not profitable. Hence, the supply of...