PDF Publication Title:
Text from PDF Page: 002
1 Introduction How well can a cryptocurrency serve as a means of payment? Since the creation of Bitcoin in 2009, many critics have denounced cryptocurrencies as fraud or outright bubbles. More nuanced opinions have argued that such currencies are only there to support payments for illegal activities or simply waste resources. Advocates point out, however, that – based on cryptographic principles to ensure security – these new currencies can support payments without the need to designate a third-party that controls the currency or payment instrument possibly for its own profit.1 We take up this discussion and develop a general equilibrium model of a cryptocurrency that uses a blockchain as a record-keeping device for payments. Although Bitcoin in its current form has immense welfare costs, an optimally designed cryptocurrency can potentially support payments rather well. First, using Bitcoin transactions data, we show that the welfare cost of a cryptocurrency can be comparable to a cash system with moderate inflation. Second, using summary statistics for US debit card transactions, we find that a cryptocurrency can perform nearly as well as a low-value, retail payment system operating with very low fees.2 Economics research so far has provided little insight into the economic relevance of cryptocurrencies. Most existing models of cryptocurrencies are built by computer scientists who mainly focus on the feasibility and security of these systems. Crucial issues such as the incentives of participants to cheat and the endogenous nature of some key variables such as the real value of a cryptocurrency in exchange have been largely ignored. Such considerations, however, are pivotal for understanding the optimal design and, hence, the economic value of cryptocurrency as a means of payment. Our focus is primarily on understanding how the design of a cryptocurrency influences the inter- actions among participants and their incentives to cheat. These incentives arise from a so-called “double-spending” problem. Cryptocurrencies are based on digitial records and, thus, can be copied easily and costlessly which means that they can potentially be used several times in transactions 1Some central banks have recently started to also explore the adoption of cryptocurrency and blockchain technolo- gies for retail and large-value payments. Examples are the People’s Bank of China who aims to develop a nationwide digital currency based on blockchain technology; the Bank of Canada and the Monetary Authority of Singapore who are studying its usage for interbank payment systems; and the Deutsche Bundesbank who has developed a preliminary prototype for blockchain-based settlement of financial assets. 2This raises the issue that many cryptocurrencies currently cannot be scaled sufficiently to function as a true replacement of large retail payment networks. We abstract completely from such scalability issues that mainly arise from technological constraints. 2PDF Image | The Economics of Cryptocurrencies Bitcoin and Beyond
PDF Search Title:
The Economics of Cryptocurrencies Bitcoin and BeyondOriginal File Name Searched:
chiu_paper.pdfDIY PDF Search: Google It | Yahoo | Bing
NFT (Non Fungible Token): Buy our tech, design, development or system NFT and become part of our tech NFT network... More Info
IT XR Project Redstone NFT Available for Sale: NFT for high tech turbine design with one part 3D printed counter-rotating energy turbine. Be part of the future with this NFT. Can be bought and sold but only one design NFT exists. Royalties go to the developer (Infinity) to keep enhancing design and applications... More Info
Infinity Turbine IT XR Project Redstone Design: NFT for sale... NFT for high tech turbine design with one part 3D printed counter-rotating energy turbine. Includes all rights to this turbine design, including license for Fluid Handling Block I and II for the turbine assembly and housing. The NFT includes the blueprints (cad/cam), revenue streams, and all future development of the IT XR Project Redstone... More Info
Infinity Turbine ROT Radial Outflow Turbine 24 Design and Worldwide Rights: NFT for sale... NFT for the ROT 24 energy turbine. Be part of the future with this NFT. This design can be bought and sold but only one design NFT exists. You may manufacture the unit, or get the revenues from its sale from Infinity Turbine. Royalties go to the developer (Infinity) to keep enhancing design and applications... More Info
Infinity Supercritical CO2 10 Liter Extractor Design and Worldwide Rights: The Infinity Supercritical 10L CO2 extractor is for botanical oil extraction, which is rich in terpenes and can produce shelf ready full spectrum oil. With over 5 years of development, this industry leader mature extractor machine has been sold since 2015 and is part of many profitable businesses. The process can also be used for electrowinning, e-waste recycling, and lithium battery recycling, gold mining electronic wastes, precious metals. CO2 can also be used in a reverse fuel cell with nafion to make a gas-to-liquids fuel, such as methanol, ethanol and butanol or ethylene. Supercritical CO2 has also been used for treating nafion to make it more effective catalyst. This NFT is for the purchase of worldwide rights which includes the design. More Info
NFT (Non Fungible Token): Buy our tech, design, development or system NFT and become part of our tech NFT network... More Info
Infinity Turbine Products: Special for this month, any plans are $10,000 for complete Cad/Cam blueprints. License is for one build. Try before you buy a production license. May pay by Bitcoin or other Crypto. Products Page... More Info
| CONTACT TEL: 608-238-6001 Email: greg@infinityturbine.com | RSS | AMP |