Please note that this seminar is an in-person event at Melbourne Connect and is open to the public.

Title: The Bitcoin blockchain: what can mathematical modelling teach us?

Summary: In 2009 the pseudononymous Satoshi Nakamoto published a short paper on the Internet, together with accompanying software, that proposed an `electronic equivalent of cash’ called Bitcoin. At its most basic level, Bitcoin is a payment system where transactions are verified and stored in a distributed data structure called the blockchain.

The Bitcoin system allows electronic transfer of funds without the presence of a trusted third party. It achieves this by making it `very hard work’ to create the payment record, so that it is not computationally-feasible for a malicious player to repudiate a transaction and create a forward history with the transaction deleted.

As its name suggests, the blockchain is comprised of discrete blocks. Blocks are added to the blockchain by `miners’ working across a distributed peer-to-peer network to solve a computationally difficult problem. The Nakamoto paper contained a simple model used to show that the above-mentioned malicious player would be very unlikely to succeed. Unfortunately, this calculation contained an error, which I shall quickly discuss and show how to correct.

I shall finish with some brief comments about how stochastic modelling can be used to address the current concerns that the transaction processing rate of the Bitcoin system is not high enough.

Bio: Peter received his PhD in Applied Mathematics from the University of Adelaide in 1987. In 2002 he commenced at the University of Melbourne, shortly after becoming the inaugural Professor of Operations Research. He was Head of the Department of Mathematics and Statistics 2005-10. Peter is the Editor-in-Chief of the Applied Probability Trust Journals Journal of Applied Probability and Advances in Applied Probability and was the Editor-in-Chief of Stochastic Models 2002-18. He is also a member of the editorial board of Queueing Systems. Peter has held several high-ranking positions, including in 2016, he became Director of the ARC Centre of Excellence for Mathematical and Statistical Frontiers (ACEMS). In 2017, he was awarded the Ren Potts Medal by the Australian Society for Operations Research, in 2018 the George Szekeres Medal by the Australian Mathematical Society and in 2019 the ANZIAM Medal. Peter’s research interests lie in stochastic modelling and applied probability, with particular emphasis on applications in telecommunications, biological modelling, healthcare, economics and disaster management.

WED 15 FEBRUARY 4:00 PM – 5:00 PM AEDT MELBOURNE
Manhari Room, Level 7, Melbourne Connect

For more information, please contact optima-arc@unimelb.edu.au