Related papers: The Satoshi Overhang: Why the Bear Case is Bounded
Bitcoin is the first decentralized peer-to-peer (P2P) electronic currency. It was created in November 2008 by Satoshi Nakamoto. Nakamoto released the first implementation of the protocol in an open source client software and the genesis of…
What happens to mining when the Bitcoin price changes, when there are mining supply shocks, the price of energy changes, or hardware technology evolves? We give precise answers based on the technical forces and incentives in the system. We…
We analyze the first and second moment risk premia in the Bitcoin market based on options and realized returns and contrast them to the premia embedded in the main US stock index market. First, Bitcoin is much more volatile and has a higher…
Mining blocks on a blockchain equipped with a proof of work consensus protocol is well-known to be resource-consuming. A miner bears the operational cost, mainly electricity consumption and IT gear, of mining, and is compensated by a…
Selfish mining, which is an attack on the integrity of the Bitcoin network, was first proposed by Cornell researchers Emin Gun Sirer and Ittay Eyal in 2013. Selfish mining attack also exists in most Nakamoto consensus protocols. Generally…
Most public blockchain protocols, including the popular Bitcoin and Ethereum blockchains, do not formally specify the order in which miners should select transactions from the pool of pending (or uncommitted) transactions for inclusion in…
This research aims to identify how Bitcoin-related news publications and online discourse are expressed in Bitcoin exchange movements of price and volume. Being inherently digital, all Bitcoin-related fundamental data (from exchanges, as…
When analyzing Bitcoin users' balance distribution, we observed that it follows a log-normal pattern. Drawing parallels from the successful application of Gibrat's law of proportional growth in explaining city size and word frequency…
Permisionless decentralized ledgers ("blockchains") such as the one underlying the cryptocurrency Bitcoin allow anonymous participants to maintain the ledger, while avoiding control or "censorship" by any single entity. In contrast,…
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…
Blockchain systems are designed to produce blocks at a constant average rate. The most popular systems currently employ a Proof of Work (PoW) algorithm as a means of creating these blocks. Bitcoin produces, on average, one block every 10…
We give a straightforward proof for the formula giving the long-term apparent hashrate of the Selfish Mining strategy in Bitcoin using only elementary probabilities and combinatorics, and more precisely, Dyck words. There is no need to…
Explaining changes in bitcoin's price and predicting its future have been the foci of many research studies. In contrast, far less attention has been paid to the relationship between bitcoin's mining costs and its price. One popular notion…
Most popular blockchain solutions, like Bitcoin, rely on proof-of-work, guaranteeing that the output of the consensus is agreed upon with high probability. However, this probability depends on the delivery of messages and that the…
We mine the leaked history of trades on Mt. Gox, the dominant Bitcoin exchange from 2011 to early 2014, to detect the triangular arbitrage activity conducted within the platform. The availability of user identifiers per trade allows us to…
Many of the recent works on the profitability of rogue mining strategies hinge on a parameter called $\gamma$ that measures the proportion of the honest network attracted by the attacker to mine on top of his fork. These works, see…
Bitcoin uses blockchain technology to maintain transactions order and provides probabilistic guarantee to prevent double-spending, assuming that an attacker's computational power does not exceed %50 of the network power. In this paper, we…
Currently, there is no consensus on the real properties of Bitcoin. The discussion comprises its use as a speculative or safe haven assets, while other authors argue that the augmented attractiveness could end accomplishing money's…
Tether Limited has the sole authority to create (mint) and destroy (burn) Tether stablecoins (USDT). This paper investigates Bitcoin's response to USDT supply change events between 2014 and 2021 and identifies an interesting asymmetry…
Blockchains have a storage scalability issue. Their size is not bounded and they grow indefinitely as time passes. As of August 2017, the Bitcoin blockchain is about 120 GiB big while it was only 75 GiB in August 2016. To benefit from…