Related papers: The mathematics of Bitcoin
Modern societies have adopted government-issued fiat currencies many of which exist today mainly in the form of digits in credit and bank accounts. Fiat currencies are controlled by central banks for economic stimulation and stabilization.…
Bitcoin is a cryptocurrency that features a distributed, decentralized and trustworthy mechanism, which has made Bitcoin a popular global transaction platform. The transaction efficiency among nations and the privacy benefiting from address…
In this paper we propose a deep recurrent architecture for the probabilistic modelling of high-frequency market prices, important for the risk management of automated trading systems. Our proposed architecture incorporates probabilistic…
Some blockchain networks employ a distributed consensus algorithm featuring Byzantine fault tolerance. Notably, certain public chains, such as Cosmos and Tezos, which operate on a proof-of-stake mechanism, have adopted this algorithm. While…
We show that infinite divisibility of a trading commodity leads to a self-sustained price bubble when traders use adaptive investment strategies. The adaptive strategy can be viewed as a psychological response of a trader to the situation…
This study investigates the volatility of daily Bitcoin returns and multifractal properties of the Bitcoin market by employing the rolling window method and examines relationships between the volatility asymmetry and market efficiency.…
The study of order volumes in financial markets has shown that these display several non-trivial statistical properties. Most studies have been focused on the bulk properties of volume of incoming orders or of realized transactions rather…
This paper studies to what extent the cost of operating a proof-of-work blockchain is intrinsically linked to the cost of preventing attacks, and to what extent the underlying digital ledger security budgets are correlated with the…
Cryptocurrency networks such as Bitcoin have emerged as a distributed alternative to traditional centralized financial transaction networks. However, there are major challenges in scaling up the throughput of such networks. Lightning…
Proof-of-Work (PoW) is a popular consensus protocol used by Bitcoin since its inception. PoW has the well-known flaw of assigning all the reward to the single miner (or pool) that inserts the new block. This has the consequence of making…
The study examines whether fama-french equity factors can effectively explain the idiosyncratic risk and return characteristics of Bitcoin. By incorporating Fama-french factors, the explanatory power of these factors on Bitcoin's excess…
This letter investigates the dynamic relationship between market efficiency, liquidity, and multifractality of Bitcoin. We find that before 2013 liquidity is low and the Hurst exponent is less than 0.5, indicating that the Bitcoin time…
We condense the theory of blockchains down to a simple and compact set of four type equations (Idealised EUTxO), and to an algebraic characterisation (abstract chunk systems), and exhibit an adjoint pair of functors between them. This gives…
Following the birth of Bitcoin and the introduction of the Ethereum ERC20 protocol a decade ago, recent years have witnessed a growing number of cryptographic tokens that are being introduced by researchers, private sector companies and…
Prediction of stock prices has been a crucial and challenging task, especially in the case of highly volatile digital currencies such as Bitcoin. This research examineS the potential of using neural network models, namely LSTMs and GRUs, to…
Ethereum represents new innovation in the fields of cryptocurrency which has become relatively stagnate, promising many things, including an entire programming language and development enviroment built into the network. However the current…
The year 2024 witnessed a major development in the cryptocurrency industry with the long-awaited approval of spot Bitcoin exchange-traded funds (ETFs). This innovation provides investors with a new, regulated path to gain exposure to…
Bitcoin is a "crypto currency", a decentralized electronic payment scheme based on cryptography. Bitcoin economy grows at an incredibly fast rate and is now worth some 10 billions of dollars. Bitcoin mining is an activity which consists of…
In this paper we describe the various scoring systems used to calculate rewards of participants in Bitcoin pooled mining, explain the problems each were designed to solve and analyze their respective advantages and disadvantages.
In this paper we revisit some major orthodoxies which lie at the heart of the bitcoin crypto currency and its numerous clones. In particular we look at The Longest Chain Rule, the monetary supply policies and the exact mechanisms which…