Related papers: The Satoshi Overhang: Why the Bear Case is Bounded
In recent years, cryptocurrencies have attracted growing attention from both private investors and institutions. Among them, Bitcoin stands out for its impressive volatility and widespread influence. This paper explores the predictability…
Bitcoin mining presents a significant economic incentive for efficient hashing and broadcast of data, both parameters stemming from the Proofs of Work used to advance the network. This incentive has led to the development of Bitcoin…
The Nakamoto consensus protocol underlying the Bitcoin blockchain uses proof of work as a voting mechanism. Honest miners who contribute hashing power towards securing the chain try to extend the longest chain they are aware of. Despite its…
Bitcoin already faces a quantum threat through Shor attacks on elliptic-curve signatures. This paper isolates the other component that public discussion often conflates with it: mining. Grover's algorithm halves the exponent of brute-force…
Cryptocurrencies are highly volatile financial instruments with more and more new retail investors joining the scene with each passing day. Bitcoin has always proved to determine in which way the rest of the cryptocurrency market is headed…
BRC20 tokens are a type of non-fungible asset on the Bitcoin network. They allow users to embed customised content within Bitcoin's satoshis. The token frenzy reached a market size of US\$2.811\,b (2023Q3--2025Q1). However, this intuitive…
The Bitcoin protocol prescribes certain behavior by the miners who are responsible for maintaining and extending the underlying blockchain; in particular, miners who successfully solve a puzzle, and hence can extend the chain by a block,…
Bitcoin is a decentralized P2P digital currency in which coins are generated by a distributed set of miners and transaction are broadcasted via a peer-to-peer network. While Bitcoin provides some level of anonymity (or rather pseudonymity)…
We describe and analyze perishing mining, a novel block-withholding mining strategy that lures profit-driven miners away from doing useful work on the public chain by releasing block headers from a privately maintained chain. We then…
A hard-fork reconfiguration of the peer to peer Bitcoin network is described that substitutes tamper-evident logs and proof-of-stake consensus for proof-of-work consensus. The block creation rewards and transaction fees are reallocated to…
The world economy is experiencing the novel adoption of distributed currencies that are free from the control of central banks. Distributed currencies suffer from extreme volatility, and this can lead to catastrophic implications during…
Proof-of-work allows Bitcoin to boast security amidst arbitrary fluctuations in participation of miners throughout time, so long as, at any point in time, a majority of hash power is honest. In recent years, however, the pendulum has…
Since the initial launch of Bitcoin by Satoshi Nakamoto in 2009, decentralized digital currencies have long been of major interest in both the academia and the industry. Till today, there are more than 3000 different cryptocurrencies over…
We study the temporal evolution of the holding-time distribution of bitcoins and find that the average distribution of holding-time is a heavy-tailed power law extending from one day to over at least $200$ weeks with an exponent…
Cryptocurrencies have recently been in the spotlight of public debate due to their embrace by the new US President, with crypto fans expecting a 'bull run'. The global cryptocurrency market capitalisation is more than \$3.50 trillion, with…
This discussion applies quantitative finance methods and economic arguments to cryptocurrencies in general and bitcoin in particular -- as there are about $10,000$ cryptocurrencies, we focus (unless otherwise specified) on the most…
In Aug. 2017, Bitcoin was split into the original Bitcoin (BTC) and Bitcoin Cash (BCH). Since then, miners have had a choice between BTC and BCH mining because they have compatible proof-of-work algorithms. Therefore, they can freely choose…
As Bitcoin's popularity has grown over the decade since its creation, it has become an increasingly attractive target for adversaries of all kinds. One of the most powerful potential adversaries is the country of China, which has expressed…
Although Bitcoin was intended to be a decentralized digital currency, in practice, mining power is quite concentrated. This fact is a persistent source of concern for the Bitcoin community. We provide an explanation using a simple model to…
The behaviour of Bitcoin owners is reflected in the structure and the number of bitcoin transactions encoded in the Blockchain. Likewise, the behaviour of Bitcoin traders is reflected in the formation of bullish and bearish trends in the…