An artificial cryptocurrency market in which programmed agents interact according to various parameters in an attempt to construct a simulator for market analysis.
The Bitcoin Foundation’s three-part mission to”standardize, protect, and promote Bitcoin” is a pithy statement of purpose. There is much implicit in that short summary, of course. A granular assessment of the foundation’s charge and the challenges it faces can help ensure that the foundation serves all its purposes well. What exactly makes Bitcoin special? What threatens Bitcoin? How can the Bitcoin Foundation protect Bitcoin against these threats? Articulately studying these questions can help drive community-wide consensus on what makes Bitcoin an asset, what the greatest risks to Bitcoin are, and how to address them. Risk management is an essential tool for exploring these issues and for planning the activities and communications of the Bitcoin Foundation.
- Bitcoin Foundation
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An overview of the current state of cryptocurrencies and from the perspectives of economics, computer science, and mathematics.
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Five years after the introduction of the peer-to-peer payment system and digital currency bitcoin, cryptocurrencies have flourished and become a global phenomenon. Concerns regarding the impact of cryptocurrency on financial stability and the conduct of monetary policy have drawn regulatory scrutiny and formal policy stances on this emerging phenomenon. The main purpose of the present […]
Short overview of bitcoin from the perspective of academic economics.
Cryptocurrencies1 are rapidly gaining more and more interest as a technology that is potentially groundbreaking and disruptive for the whole payments industry on a global scale. However the future of cryptocurrencies is very unclear as there are many different usage scenarios and different stakeholders have different needs. In order to be able to give a […]
When processing transactions in a block, a miner increases his reward but also decreases his probability to earn any reward because the time needed for his block to reach consensus depends on its size. We show that this leads to a game situation between miners. We analytically solve this game for two miners. Then, we […]
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An examination of Bitcoin as a consensus game, in which participants expend resources on solving computational puzzles in order to collect rewards, with a demonstration of a Nash equilibrium in which all players behave consistently with Bitcoin‰Ûªs reference implementation.
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The Future of Bitcoin, Mapping the Global Adoption of World’s Largest Cryptocurrency Through Benefit Analysis
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Bitcoin has achieved large-scale acceptance and popularity by promising its users a fully decentralized and low-cost virtual currency system. However, recent incidents and observations are revealing the true limits of decentralization in the Bitcoin system. In this article, we show that the vital operations and decisions that Bitcoin is currently undertaking are not decentralized. More […]
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An argument that in an unforeseeable future, zero or infinitesimal transaction fees will not be sustainable on the bitcoin network due to financial incentives involved with the pertinent processes.
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Mt.Gox Is Dead, Long Live Bitcoin! Analysis of the Rise and Fall of a Leading Virtual Currency Exchange Platform
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Cryptocurrencies are digital alternatives to traditional government-issued paper monies. Given the current state of technology and skepticism regarding the future purchasing power of existing monies, why have cryptocurrencies failed to gain widespread acceptance? I offer an explanation based on network effects and switching costs. In order to articulate the problem that agents considering cryptocurrencies face, […]
Bitcoin is an open source peer-to-peer electronic money and payment system. It is traded at several exchanges and high-frequency trade data are publicly available. We study the contributions of Bitcoin exchanges to price discovery. Our results show that Mt.Gox and BTC-e are the market leaders with the highest information share. Our analysis further suggests that […]
Proponents hype the benefits of Bitcoin transactions as being faster and cheaper than traditional methods; however, concerns around the lack of a central governing agency, lack of controls over Bitcoin exchanges, and the volatility of the virtual currency persist. Therefore, a company’s use of Bitcoin, as a medium of exchange or as an investment, involves […]