Bitcoin and other cryptocurrencies have been frequently on media lately. As these cryptocurrencies are relatively new, there are not much economic theory explaining their behavior and price developments. Due to these reasons, the goal of this thesis is to find an economic theory to study the demand for Bitcoin. \n \nIn this thesis, I will write about Bitcoin applying it to Walshâs Money in Utility function (MIU function). I will modify Walshâs original model by incorporating Bitcoin to it. In this model, Bitcoin is used as payment method and as a store of value. Both Bitcoin and money can be used to buy any goods, but there are certain goods that are easier to buy using bitcoin. Hence, Bitcoin has transaction benefit and the households will always need some bitcoin holdings in their portfolio. Using Walshâs MIU function, I will derive a demand function for Bitcoin. \n \nIn addition to this, I will go through the working paper âBitcoin Pricing, Adoption, and Usage: Theory and Evidenceâ written by Athey et Al. (August 2016). In this paper, Bitcoin is used both as a payment method and a store of value. From the findings by Athey et Al., Bitcoin seems to be mainly used as a store of value. I will present an overview of the paper including the results and then concentrate on their aggregate analysis on Bitcoin exchange rate. \n \nBased on the Bitcoin exchange rate equation presented by Athey et Al., I will study whether Bitcoin demand function derived from MIU model is able to explain the changes in Bitcoinâs aggregate demand in real market. As expected, due to the assumptions and restrictions of the model, Bitcoin demand function derived in this thesis is not able to fully explain the changes in demand for Bitcoin in real world. Nonetheless, subject to the assumptions and restrictions of the model, Bitcoin demand function can be used to study the relationship between bitcoin demand, domestic nominal interest rate and consumption. Finally, I will present an alternative approach to further study Bitcoinâs demand.
As a neoteric high-tech product, electric vehicles (EVs) can effectively solve the problems of energy shortages and environmental pollution. On the one hand, EV can relieve the peak load of a smart grid and improve the electricity system operation. On the other hand, EVâs electricity trading information can provide useful data for vehicle management departments to electricity scheduling. However, hackers can easily obtain data from the central database to simulate both parties involved, which leads to the receiver getting unauthorized information. For these challenges, we propose a novel secure electricity trading and incentive contract model based on the basic rules of Chinaâs electricity market. The digital signature technology adopts elliptic curve bilinear pairing to guarantee the reliability and integrity of the transaction information. Energy blockchain is utilized for encryption and distributed storage of energy data with the possession of tamper-proof and traceability. The consistency part of the data block applies a practical Byzantine fault-tolerant (PBFT) algorithm, which not only increases transaction throughput but also reduces transmission delay. The incentive contract based on revenue rewards can promote the benign interaction of EVs. The security analysis reveals that this scheme can achieve better results. Compared with other schemes, our scheme saves about 64.55% of the communication overhead and validates the same number of signed messages in a shorter time. Incentive contracts based on game theory can facilitate EV electricity trading through energy coin rewards. This mechanism makes EV more willing and active to participate in transactions that guarantee the activity and stability of the network.
This study applies threshold regression model in a bivariate framework to explore the nonlinear and long-term relationship among daily Bitcoin and gold prices over the period April 2010 to December 2018. Our empirical results are threefold: first, we show that gold is a significant predictor of Bitcoin prices. Second, we find evidence of a non-linear relationship between Bitcoin and gold prices characterized rather by a two-regime relationship with a structural break occurring in October 2017. Third, we explain the existence at before the break, there is statistically significant, negative but weak causality indicating that Bitcoin is a speculative asset. However, after the break, the relationship becomes positive and strong revealing the diversifier and hedge properties of Bitcoin.
The purpose of this study is to apply the α-Sutte Indicator and ARIMA in forecasting data. α-Sutte Indicator is a new forecasting method that was developed in 2017 by Ansari Saleh Ahmar. To see the accuracy of these methods, the forecasting results of the α-Sutte Indicator will be forecasting methods compared to other items, namely: ARIMA. Based on the results of forecasting, it is found that α-Sutte Indicator has MSE and MAE values that are lower than other methods (ARIMA). This is supported by MSE data from α-Sutte Indicator smaller than ARIMA(1,1,1).
The recent surge in renewable energy in the distribution grid could transform the generation side to be more variable, which potentially reduces power quality. This technical local challenge could be compensated by introducing a market solution, which could be realised in the form of a local energy market. Such markets requires a comprehensive infrastructure, where a centralised database solution traditionally have been used. However, blockchain technology have lately been presented as a possible preferable alternative. Blockchain is a decentralised communication platform, which logs all information in a structured and tamper-proof manner. This design makes it potentially suitable for operating a local energy market. However, there have not been performed a lot of research on the feasibility of developing local energy markets using blockchain technology. This will be therefore be the focus of this thesis, where a technical, economic and regulatory analysis are performed.\n\nThis thesis address this feasibility by developing a complex local energy market, deploying this on a test blockchain and analyse the results. The market consists of three unique trading mechanisms, where all explores the benefits of flexible loads. These trading mechanisms are then represented as blockchain applications, and simulated over a range of scenarios. The results illustrate a proof of concept, in addition to measure the usage of computational resources of operating blockchain applications.\n\nThe market simulation proved the technical feasibility of running several complex mechanisms in a blockchain environment, with an integrated payment solution. The observed computational resource consumption of the market revealed that a complex real time trading with 600 nodes and a trading frequency of 5 minutes requires a blockchain that can process 10.2 standard Ethereum transactions per second. This is considered to be possible for a modern blockchain protocol to process. The blockchain application design is also analysed, where it is identified how applications should be designed in order to lower the resulting computational consumption. In result, this thesis identifies blockchain technology as suited to operate a local energy market, without significant negative computational consequences. \n\nRegarding the economical feasibility, such a solution is considered to be more expensive than a database solution when it comes to development costs. However, a blockchain solution presents new market possibilities, which could result in a more efficient market, and hence be more economically beneficial. Regarding a regulatory analysis, the Norwegian energy market regulations presents several challenges towards decentralised local energy markets. However, the technology behind blockchain could provide arguments for changing these regulations, and hence make it possible for end users to participate actively in an energy market.
Bitcoin emerged as a cryptocurrency relying on new blockchain technology in 2009, but how to regulate it was not immediately clear. The recent emergence of bitcoin futures poses a new level of risk to the economy, again raising questions of regulation. This is the first law review article to examine the potential regulatory regime for bitcoin futures.
Bitcoin is a digital currency based on a peer-to-peer payment system managed by an open source software and characterized by lower transaction costs, greater security and scalability than fiat money and no need of a central bank. Despite criticisms about illegal uses and social consequences, it is attracting the interest of the scientific community. The purpose of this work is to define and evaluate the current trends of the literature concerned with the sustainability of bitcoin, considering the environmental impacts, social issues and economic aspects. From the analysis it emerges that the transition of the whole monetary system in the new cryptocurrency will result in an unacceptable amount of energy consumed to mine new bitcoins and to maintain the entire virtual monetary system, and probably bitcoin will remain a niche currency. Blockchain, which is the base for a distributed and democratically-sustained public ledger of the transactions, could foster new and challenging opportunities. Sharing the framework of medical data, energy generation and distribution in micro-grids at the citizen level, block-stack and new state-driven cryptocurrencies, may benefit from the wide spread of blockchain-based transactions. Under the perspective of its being a driver of social change, bitcoins and related blockchain technologies may overcome the issues highlighted by numerous detractors.
Nearly twenty-five years ago, the internet disrupted the world and started a new era of technological supremacy. Today, with the rise of cryptocurrencies and its underlying technology we stand at the helm of another such revolution. Cryptocurrencies like bitcoin are peer-to-peer decentralized systems of digital currencies which operate without the need for a third-party intermediary like RBI. Coupled with lack of regulatory guidance, its unique technical aspects create huge complications in its taxation. While much ignorance still prevails in respect of cryptocurrencies, countries around the world have finally started taking notice and act upon it. This paper overviews the complete landscape of taxation of bitcoin-like cryptocurrencies. In this paper, an attempt is made to explain the indirect as well as direct tax structure concern cryptocurrencies, particularly after the implementation of Goods and Service Tax Act, 2017. The paper explains what bitcoins are, why are they important and whether it is necessary for the Government to regulate it. In addition, it discusses the prevailing regulatory structure as well as issues concerning evasionary practices in digital currencies. The findings help assess regulatory aspects in light of technological, economic, social and financial forces and establishes a set framework for taxation of cryptocurrencies.
This paper analyses the heterogeneity of household consumer preferences for electricity service contracts in a smart grid context. Platform pricing strategies that could incentivise consumers to participate in a two-sided electricity platform market are discussed. The research is based on original data from a discrete choice experiment on electricity service contracts that was conducted with 1,892 electricity consumers in Great Britain in 2015. We estimate a flexible mixed logit model in willingness to pay space and exploit the results in posterior analysis. The findings suggest that while consumers are willing to pay for technical support services, they are likely to demand significant compensation to share their usage and personally identifying data and to participate in automated demand response programs involving remote monitoring and control of electricity usage. Cross-subsidisation of consumers combining appropriate participation payments with sharing of bill savings could incentivise participation of the number of consumers required to provide the optimal level of demand response. We also examine the preference heterogeneity to suggest how, by targeting customers with specific characteristics, smart electricity service providers could significantly reduce their customer acquisition costs.
Although researchers have acknowledged the issue of commercial viability previously, it is only recently that they have laid emphasis on addressing the relative importance of commercial viability to catalyze the dissemination of decentralized sustainable energy systems to rural consumers in developing countries. A business enterprise is said to be commercially viable if its revenues are > costs. Here in this thesis these business enterprises or promoters of efforts are called as renewable energy companies (RECâs). Moreover researchers have failed to acknowledge or address the role of revenues even after acknowledging the merits of a market driven approach as opposed to donor driven approach. Given such a high relevance of revenues in a market approach to operate successfully and a lack of focus on the same by researchers, in this thesis we will analyze the practical issue of commercial viability of Indian RECâs through the lens of revenue model, while also addressing the literature gap on revenue drivers or revenue model components by exploring various relevant revenue drivers of commercially viable RECâs. This study takes an exploratory case study approach to enlist all the relevant revenue driver or revenue model components that are relevant for RECâs to attain commercial viability. This thesis primarily consists of three subsequent phases: first phase: theoretical gap identification. Second phase: identification of types and components of a revenue model and third phase: building a revenue driver â commercial viability framework. The aim of the first phase was to narrow in on the literate gap and also present relevant background literature. The first phase yielded the literature gap on revenue model components in addressing the practical issue of commercial viability. The aim of the second phase was to identify revenue model types and components. The result of which was that two types of revenue models namely: ownership and service revenue models was discovered. Most importantly six potential revenue drivers were also discovered. They are: consumer trust, pricing strategy, willingness to pay, flexibility of payments, number of users and revenue sharing. These six revenue drivers were derived on the premise that they would increase revenues such that RECâs attain commercial viability. This made up our initial conceptual model. Next, the aim of the third phase was to build a framework on revenue drivers or revenue model components â commercial viability of Indian RECâs. In order to do so firstly we analyzed cases where the initial conceptual model is leveraged into a more relevant context of Indian RECâs. The case studies were based on SIMPA Networks, Onergy, Rural Spark and MeraGao Power (MGP). All of these cases primarily are Indian companies exclusively catering to the Indian rural market otherwise also known as RECâs or Indian RECâs. The results of this section yielded us a relevant set of 12 revenue drivers i.e. six more in comparison to the initial set of 6 revenue drivers. They are consumer trust, supplier trust, pricing strategies, willingness to pay, flexibility of payments, number of users, revenue sharing, consumer financing, size of payments, service customization, after sales service/maintenance and discounts. Secondly, a cross case analysis was performed wherein findings from each case are pitched against each other to find the similarities and differences. The result of this section was firstly that, any sort of generalizations based on the type of revenue models was hard to come by and most importantly the type of revenue model only signified its affect on the source of financing and could play no role in explaining how and why commercial viability was being achieved. Moreover it also led to an inference that service revenue model poses more risk than ownership revenue model but however commercial viability was achieved by adopting both types of revenue model, which was quite the contrary to the outcome of literature survey. Secondly, list of revenue drivers was further narrowed to 10 from the previous list of 12. Basically willingness to pay was eliminated because it was already being considered in pricing strategies and number of users was also removed because it affected the commercial viability of RECâs in terms of both costs and revenues whereas the others only impacted only revenues. The final set of relevant revenue drivers are: consumer trust, supplier trust, pricing strategies, flexibility of payments, size of payments, revenue sharing, consumer financing, service customization, after sales service/maintenance and discounts. Lastly, a set of three factors was identified that actually contributed to the increase in revenues such that revenues were > costs. Or in other words served as a link between revenue drivers and commercial viability. They are namely: rate of adoption, recoupment of costs (regular payments) and retention. It is these afore mentioned revenue drivers that impact the three factors, which subsequently drive or increase revenues such that commercial viability can be attained. The ownership revenue model primarily derives its revenues from only the adoption factor, which subsequently brings in revenues to attain commercial viability. That said the adoption of DSEâs by the rural consumers is contingent or dependent on revenue drivers like consumer financing and size of payments among others. The revenues of RECâs employing service revenue model primarily depended on all the three factors like rate of adoption, recoupment of costs and retention. More specifically the revenue drivers should be conducive to rural customers such that they firstly adopt the product and/or service and most importantly make regular payments, which translates to revenues while retaining the existing customers. Moreover the retention factor only applies to RECâs that adopt a service revenue model with only a service platform like MGP unlike other RECâs, which adopt a only a product platform like Onergy or both product and service platform like in the case of SIMPA and Rural spark. In the backdrop of afore mentioned scientific implications several managerial implications can also be derived. Among many the key take away for incumbent managers and future potential entrants will be to look at each of the revenue drivers and adopt them carefully such that commercial viability can be attained contingent on the his/her appetite for risk and most of all focus less on the type of revenue model because that is not going to help achieve commercial viability. Future research should be aimed at firstly developing a more elaborate revenue driver- commercial viability framework. After which each of the revenue driverâs true affects on each of the factors should be quantitatively determined. This further helps to gain greater generalizability. That said the key limitation of this thesis is that it focuses only on one country i.e. India among other developing countries.