Matheus Venturyne Xavier Ferreira will present his FPO "Economics and Computation in Decentralized Systems" on Wednesday, December 1, 2021 at 11AM via Zoom and CS 402. Zoom link: [ https://princeton.zoom.us/my/matheusvxf | https://princeton.zoom.us/my/matheusvxf ] The members of his committee are as follows: Examiners: Matt Weinberg (Adviser), Arvind Narayanan, Ran Raz Readers: Mark Braverman, David C. Parks (Harvard University) A copy of his thesis is available upon request. Please email [ mailto:gardinfo@cs.princeton.edu | gradinfo@cs.princeton.edu ] if you would like a copy of the thesis. Everyone is invited to attend the talk. Abstract follows below: Algorithmic game theory studies algorithmic design under incentive constraints, and, in its foundations, the contributions between computer science and economics in this area go both ways. In one direction, economics provides new perspectives in designing secure computer systems: real-world adversaries are often not intentionally malicious but rather rational and economically driven. Notably, Bitcoin has been successful in implementing a decentralized global ledger of transactions. In the other direction, the emergence of decentralized applications poses challenges to traditional assumptions from economic theory. Notably, Internet auctions often lack transparency, and in practice, it is impossible to detect if an auctioneer, over the Internet, is cheating to improve revenue. Here, we study the problem of designing decentralized applications implemented by autonomous rational agents. First, we provide efficient constructions of credible and strategyproof optimal auctions where neither bidders nor the auctioneer has the incentive to be strategic. This result overcomes prior impossibility results in the literature using standard cryptographic assumptions. More importantly, since our auctions are revenue optimal, it shows that the auctioneer need not sacrifice revenue in favor of implementing a more transparent auction that does not rely on the auctioneer’s altruism. Blockchains are a promising tool for designing generic decentralized applications, but constructions relying on Proof-of-Work (PoW) are energy inefficient. We show that energy-efficient alternatives, notably Proof-of-Stake blockchains, can approximate the incentive guarantees of PoW when given access to public randomness. Thus we reduce the problem of designing energy-friendly blockchains to designing a trusted public source of randomness such as the NIST randomness beacon. Third, we show the connections between credible auction design with the problem of allocation block space in blockchains through a transaction fee mechanism. We propose dynamic mechanisms that provide a better user experience than the status quo and are robust manipulation from miners. Under natural conditions, we provide guarantees for the stability of our mechanism and welfare guarantees. In the last part, we investigate the role of policy and regulation in designing a secure decentralized system. Although technical advances have contributed significantly to the security of Internet systems, the proliferation of large-scale DDos attacks shows how incentive misalignment between users and manufacturers of computer devices drives the risk of computer vulnerabilities. Optimal regulations might require intervention from users and manufacturers and might be highly complex. However, we give theoretical evidence that interventions that impact only users or manufacturers can approximate the outcome of optimal ones.