Related papers: The mathematics of Bitcoin
One reason for the popularity of Bitcoin is due to its anonymity. Although several heuristics have been used to break the anonymity, new approaches are proposed to enhance its anonymity at the same time. One of them is the mixing service.…
Cryptocurrencies are examined through the asset flow equations and experimental asset markets. Since tangible value of a typical cryptocurrency is non-existent, the theory suggests that price will gravitate toward liquidity value, i.e., the…
The Lightning Network, a payment channel network with a market cap of over 192M USD, is designed to resolve Bitcoin's scalability issues through fast off-chain transactions. There are multiple Lightning Network client implementations, all…
Cryptocurrency, the most controversial and simultaneously the most interesting asset, has attracted many investors and speculators in recent years. The visibly significant market capitalization of cryptos also motivates modern financial…
One of the fundamental applications for a practically useful system of money is remuneration. Information pertaining to the amount of compensation awarded to different individuals is often considered sensitive, commanding a certain degree…
The cryptocurrency market presents both significant investment opportunities and higher risks relative to traditional financial assets. This study examines the tail behavior of daily returns for two leading cryptocurrencies, Bitcoin and…
We present an analysis of the Proof-of-Work consensus algorithm, used on the Bitcoin blockchain, using a Mean Field Game framework. Using a master equation, we provide an equilibrium characterization of the total computational power devoted…
It is known that Bitcoin enables achieving fairness in secure computation by imposing monetary penalties on adversarial parties. This functionality is called secure computation with penalties. Bentov and Kumaresan (Crypto 2014) introduced…
This work is organized as follows. In the first section we review the prior work and we have obtained our data. Next, we will look at address reuse in the Bitcoin network. We show that a great portion of users reuse their addresses which…
Bitcoin is a electronic payment system where payment transactions are verified and stored in a data structure called the blockchain. Bitcoin miners work individually to solve a computationally intensive problem, and with each solution a…
The idea of security sharing goes back to Nakamoto's introduction of merge mining, a technique that enables Bitcoin miners to reuse their hash power to bootstrap and secure other Proof-of-Work (PoW) blockchains. However, with the rise of…
Despite the fact that it is publicly available, collecting and processing the full bitcoin blockchain data is not trivial. Its mere size, history, and other features indeed raise quite specific challenges, that we address in this paper. The…
Our aim in this paper is to investigate the profitability of double-spending (DS) attacks that manipulate an a priori mined transaction in a blockchain. It was well understood that a successful DS attack is established when the proportion…
This study evaluates the performance of 41 machine learning models, including 21 classifiers and 20 regressors, in predicting Bitcoin prices for algorithmic trading. By examining these models under various market conditions, we highlight…
Bitcoin is a peer-to-peer payment system proposed by Nakamoto in 2008. Properties of the bitcoin backbone protocol have been investigated in some depth: the blockchain growth property quantifies the number of blocks added to the blockchain…
Blockchain-based cryptocurrencies prioritize transactions based on their fees, creating a unique kind of fee market. Empirically, this market has failed to yield stable equilibria with predictable prices for desired levels of service. We…
In recent years cryptocurrency trading has captured the attention of practitioners and academics. The volume of the exchange with standard currencies has known a dramatic increasing of late. This paper addresses to the need of models…
The Bitcoin protocol prevents the occurrence of double-spending (DS), i.e. the utilization of the same currency unit more than once. At the same time a DS attack, where more conflicting transactions are generated, might be performed to…
A reputation of high volatility accompanies the emergence of Bitcoin as a financial asset. This paper intends to nuance this reputation and clarify our understanding of Bitcoin's volatility. Using daily, weekly, and monthly closing prices…
This paper develops a formal game-theoretic model to examine how protocol mutability disrupts cooperative mining behaviour in blockchain systems. Using a repeated game framework with stochastic rule shocks, we show that even minor…