Definition ∞ Miner incentive compatibility refers to the alignment of economic incentives for cryptocurrency miners with the overall security and health of the blockchain network they support. A system possesses miner incentive compatibility when miners are economically motivated to act honestly and follow protocol rules, as deviating from these rules would result in a financial loss or reduced profitability. This compatibility is fundamental to the security model of Proof-of-Work blockchains, ensuring that the collective self-interest of miners reinforces the network’s integrity. It is a critical design consideration.
Context ∞ Discussions surrounding miner incentive compatibility frequently appear in crypto news when analyzing potential vulnerabilities or improvements to Proof-of-Work networks. Concerns arise when incentives might inadvertently lead to behaviors like selfish mining or transaction reordering, which could undermine network fairness or security. A key debate involves designing fee mechanisms and block reward structures that consistently align miner actions with the long-term well-being of the blockchain, ensuring robust and predictable network operation.
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