Blockchain Papers

De-Rong Kong, Tse‐Chun Lin

No abstract is available for this record.

Michael Dowling

In early 2021, non-fungible tokens (NFT) became the first application of blockchain technology to achieve clear public prominence. NFTs are tradeable rights to digital assets (images, music, videos, virtual creations) where ownership is recorded in smart contracts on a blockchain. Given the NFT market emerged out of cryptocurrencies, we explore if NFT pricing is related to cryptocurrency pricing. A spillover index shows only limited volatility transmission effects between cryptocurrencies and NFTs. But wavelet coherence analysis indicates co-movement between the two sets of markets. This suggests that cryptocurrency pricing behaviours might be of some benefit in understanding NFT pricing patterns. However, the low volatility transmissions also indicate that NFTs can potentially be considered as a low-correlation asset class distinct from cryptocurrencies.

Lennart Ante

The market for non-fungible tokens (NFTs), transferrable and unique digital assets on public blockchains, has received widespread attention and experienced strong growth since early 2021. This study provides an introduction to NFTs and explores the 14 largest submarkets using data from the Ethereum blockchain between June 2017 and May 2021. The analyses rely on (a) the number of NFT sales, (b) the dollar volume of NFT trades and (c) the number of unique blockchain wallets that traded NFTs. Based on the number of transactions and wallets, the Ethereum-based NFT market peaked at the end of 2017 due to the success of the CryptoKitties project. As of 2021, fewer transactions occur but the traded value is much higher. We find that NFT submarkets are cointegrated and feature various causal short-run connections between them. The success or adoption of younger NFT projects is influenced by that of more established markets. At the same time, the success of newer markets has an impact on the more established projects. The results contribute to the overall understanding of the NFT phenomenon as an emerging asset class and suggest that NFT markets are immature or even inefficient.

Lennart Ante

Non-fungible tokens (NFTs) are transferrable rights to digital assets, such as art, in-game items, collectables, or music. The phenomenon and its markets have grown significantly since early 2021. We investigate the interrelationships between NFT sales, NFT users (unique active blockchain wallets), and the pricing of Bitcoin (BTC) and Ether (ETH). Using daily data between January 2018 and April 2021, we show that a Bitcoin price shock triggers an increase in NFT sales. Also, Ether price shocks reduce the number of active NFT wallets. The results suggest that (larger) cryptocurrency markets affect the growth and development of the (smaller) NFT market, but there is no reverse effect.

Zengsheng Zhong, Shuirun Wei, Yeting Xu, Ying Zhao · 7 authors

Many blockchain-based cryptocurrencies provide users with online blockchain explorers for viewing online transaction data. However, traditional blockchain explorers mostly present transaction information in textual and tabular forms. Such forms make understanding cryptocurrency transaction mechanisms difficult for novice users (NUsers). They are also insufficiently informative for experienced users (EUsers) to recognize advanced transaction information. This study introduces a new online cryptocurrency transaction data viewing tool called SilkViser. Guided by detailed scenario and requirement analyses, we create a series of appreciating visualization designs, such as paper ledger-inspired block and blockchain visualizations and ancient copper coin-inspired transaction visualizations, to help users understand cryptocurrency transaction mechanisms and recognize advanced transaction information. We also provide a set of lightweight interactions to facilitate easy and free data exploration. Moreover, a controlled user study is conducted to quantitatively evaluate the usability and effectiveness of SilkViser. Results indicate that SilkViser can satisfy the requirements of NUsers and EUsers. Our visualization designs can compensate for the inexperience of NUsers in data viewing and attract potential users to participate in cryptocurrency transactions.

Amy Whitaker, Roman Kräussl

A core challenge in studying the real return on artist' work is the extreme difficulty accessing private records from when an artwork was first sold and thus relying on public auction data. In addition, artists do not typically receive proceeds after the initial sale. This paper, for the first time, uses archivally sourced primary market records to model returns on art and introduces a novel fractional equity structure for artists. We first model what would happen if the American artists Jasper Johns and Robert Rauschenberg had retained 10% equity in their work when it was first sold. Second, we model a portfolio return using data from the Betty Parsons Gallery and the Green Gallery. To add a portfolio analysis to the performance of “star” artists, we model the galleries as a fund invested in all of artworks sold, using auction sales as the realization event. We find that the individual Johns and Rauschenberg works would have vastly outperformed equities markets. The gallery portfolio still substantially outperforms the S&P, even including 20% transaction costs. Beyond the art market, our larger conceptual framework for retained fractional equity has broad implications for compensation of early-stage creative work in any field and for potential applications of blockchain technology. This paper was accepted by Karl Diether, finance.

Alesha Serada, Tanja Sihvonen, J. Tuomas Harviainen

This article analyzes specific characteristics of value created through digital scarcity and blockchain-proven ownership in cryptogames. Our object of study is CryptoKitties, the first instance of a blockchain-based game that has garnered media recognition and financial interest. The objective of this article is to demonstrate the limits of scarcity in value construction for owners of CryptoKitties tokens, manifested as breedable virtual cats. Our work extends the trends set out by earlier cryptocurrency studies from the perspective of cultural studies. For the purpose of this article, we rely on open blockchain analytics such as DappRadar and Etherscan, as well as player-created analytics, backed by a one-year-long participant observation period in the said game for research material. Combining theoretical cryptocurrency and Bitcoin studies, open data analysis, and virtual ethnography enables a grounded discussion on blockchain-based game design and play.

Sijia Zhang, Andros Gregoriou

In this article, we empirically examine the cryptocurrency market reaction to china prohibiting initial coin offerings, on the 4 September 2007 for the 100 largest cryptocurrencies. The announcement has a significant negative but temporary impact on cryptocurrency returns and liquidity.

Pavel Kireyev

No abstract is available for this record.

Marina Kochetkova

Blockchain is usually associated with cryptocurrencies. However, as a distributed ledger technology, it can have many other applications. For example, blockchain can bring changes to how the art market operates. It can be utilised for many types of digital transactions, including collection, authentication, tracking of provenance, and sharing ownership of artworks.
\nThis main purpose of this thesis is to provide perspectives on how and in what areas blockchain could be used to change the art market. It also examines how this technology may shift the balance of powers in the art market. The thesis further explores opportunities and challenges when using blockchain technology in the art market.
\nThe thesis utilises a narrative thematic literature research methodology and includes a qualitative analysis of blockchain technology. Due to the nature and novelty of this technology, the reviewed literature covers a different range of disciplines, in which blockchain can be utilised. The findings were extrapolated to the use of blockchain technology in the art market.
\nThe results demonstrate that blockchain can increase the speed, transparency, and volume of art sales worldwide and democratise the sector so that artists, collectors, and spectators can benefit from this technology. A blockchain platform can coexist with other traditional applications. However, before implementing this technology, we may need to overcome technological, governance, organisational, and societal barriers.

Sasmita Claudia Pontoh, Eko Rizkianto

No abstract is available for this record.

Yukun Liu, Jinfei Sheng, W. Wang

No abstract is available for this record.

Devesh Chandra, Pranav Tyagi, Radhe Shyam Gupta, Aayush Mohan Saxena · 5 authors

  The application of machine learning algorithms in predicting cryptocurrency prices has gained significant attention in recent years. Researchers have explored various approaches such as recurrent neural networks, deep learning neural networks, Bayesian regression, k-nearest neighbor, support vector machine, and other algorithms to forecast the prices of cryptocurrencies like Bitcoin, Ethereum, Dogecoin and Litecoin. This paper will draw on established literature on price prediction using machine learning, including studies on NFT sales predictability, NFT sale price fluctuations prediction, gold price prediction, and silver price forecasting. The research paper has focused on utilizing high-dimensional features, time-series analysis, as well as the comparison of different statistical models and machine learning algorithms. Additionally, the prediction models have incorporated factors such as market liquidity, exchange market dynamics. While the literature acknowledges the potential of machine learning in cryptocurrency price prediction, gold, silver and NFT’s there is a recognized gap in the application of these techniques across a broader range of cryptocurrencies. The proposed methodology will integrate various machine learning models and statistical methods to predict the prices of cryptocurrencies, gold, silver, and NFTs, taking into account factors such as market trends, trade networks and visual features. Furthermore, the studies emphasize the importance of feature engineering, sample dimension engineering, and the use of various machine learning techniques to enhance the accuracy and stability of cryptocurrency price predictions. As the cryptocurrency market continues to expand, there is a need for further research to develop robust machine learning models that can effectively forecast the prices of diverse cryptocurrencies, contributing to the advancement of this field.

Brian D. Feinstein, Kevin Werbach

ABSTRACT The meteoric growth of global cryptocurrency markets presents novel challenges to regulators. Some policymakers and scholars warn that regulation will cause trading activity to cross borders into less-regulated jurisdictions—or even smother a promising new financial asset class. Others believe regulatory actions will stimulate activity by providing clarity to market participants. Standing behind this disagreement is a debate about the desirability of either outcome. Some believe that governments should promote development of the cryptocurrency sector within their countries, while others view cryptocurrencies as conduits of illegality and fraud that should be restricted through strict regulation or even outright bans. Yet these debates have, to date, been conducted almost entirely without data concerning the effects of regulation on market activity. As a corrective, in this article we assembled original data on cryptocurrency regulations worldwide and used them to empirically examine movement in trading activity at a number of exchanges following key regulatory announcements. We found that a wide variety of models yielded almost entirely null results. From the creation of bespoke licensing regimes to targeted anti-money-laundering and anti-fraud enforcement actions, as well as many other categories of government activities, we found no systemic evidence that regulatory measures cause traders to flee, or enter into, the affected jurisdictions. These findings at last provide an empirical basis for regulatory decisions concerning cryptocurrency trading. Among other things, they call into question that capital flight or chilling effects should be a first-order concern.

Klaus Grobys, Juha-Pekka Junttila

This is the first paper that explores lottery-like demand in cryptocurrency markets. Since recent research provides evidence that cryptocurrency returns appear to be short-memory processes, we modify Bali, Cakici and Whitelaw’s (2011) and Bali, Brown, Murray, and Tang’s (2017) MAX measure and employ a weekly forecast horizon and daily log-returns from the previous week to calculate the metric for our portfolio sorts. From an econometric point of view, this study proposes statistical tests that are robust to unknown dynamic dependency structures in the cryptocurrency data. Our results show that average raw and risk-adjusted return differences between cryptocurrencies in the lowest and highest MAX quintiles exceed 1.50% per week. These results are robust after controlling for Bitcoin risk or potential microstructure effects. Our findings are important also from a theoretical point of view because they suggest that parallel to stock markets, similar behavioral mechanisms of underlying investor behavior are present also in new virtual currency markets.

Hanna Hałaburda, Guillaume Haeringer, Joshua S. Gans, Neil Gandal

This chapter focuses on how bitcoin performs the functions of money. A better understanding of where cryptocurrencies fall short of fiat money might allow for a better design and might possibly decrease price volatility. The medium of exchange function means a generally accepted form of payment. The Haitian gourde, for example, is fiat money in Haiti. General acceptance of various forms of fiat money is limited. To function as a medium of exchange, a currency needs a low transaction cost. Transaction costs have both domestic and international dimensions. Cryptocurrency is faster and sometimes cheaper for international and long-distance domestic transactions, whereas fiat money is cheaper for local domestic transactions. The Lightning Network technology reduces transaction costs for parties that can pool bitcoin transactions without converting into and out of fiat currency each time. Bitcoin provides users with other valuable features, such as financial privacy. Fiat money in the form of physical cash offers excellent privacy.

Orăștean Ramona, Mărginean Silvia Cristina, Raluca Sava

Abstract Since 2012, there has been growing interest in bitcoin scientific research from different fields, including computer science and engineering, economics, business and finance, law and regulatory. The purpose of this paper is to evaluate bitcoin literature based on the structures and networks of science, as a first step in the research of this new phenomenon. Analysing the growing scientific literature on bitcoin published between 2012 and 2019, we provided useful insights on academic research in this field regarding publication year, type and category, authors, journals and citations. The source of the 887 documents which support the study was Web of Science Core Collection. Using VOSviewer software we have designed bibliometric maps based on text and bibliographic data. Our study provides a knowledge area map that identifies and evaluates the links between authors and countries distribution, the conceptual structure of the field, the structure and connections of most cited papers and journals. Resuming our findings, we note a concentration of the interest on some keywords (bitcoin, cryptocurrency, blockchain) and on some influential authors (with more than 100 citations per article). As a pure expression of digital economy, the research on bitcoin as an economic concept counts only 33.5% from the total contributions in the field.

Angela Woodall, Sharon Ringel

From its origins in virtual financial transactions, emerging initiatives are seeking to acquire a new identity for blockchain as capable of addressing anxieties over the capacity of digital media to permanently and accurately store information. In this article, we explore the ensuing mediation between blockchain enterprises and new professional communities to which they are catering. Drawing on thematic analysis, we analyze how this process is being carried out through the discursive construction of trust, leveraged rhetorically in academic, trade, and news publications to extend an application for financial transactions to cultural institutions. We describe how trust is used not only to mediate the introduction of an application that prioritizes decentralization and cryptography, but is the turf on which traditional institutions are staking a claim as the trustworthy managers of digital records through their use of blockchain. The concept of the archival imaginary—a vision of what archives and blockchain should be and mean that pivots on imagined needs and technological capacities based on the current information ecology, institutional control, and expert systems—offers a way to illuminate this process.

Amy Whitaker

Blockchain technology, while commonly associated with cryptocurrencies, stands to bring radical structural change to the arts and creative industries. This paper presents a history, primer, and taxonomy of blockchain use cases in the arts and then explores the implications of blockchain in three regards: the blurring of the for-profit / nonprofit distinction, changes in the ownership structure of art, and potential for new structures of public and private support and related policy changes. These developments raise important questions of governance of a technology which requires expertise in cryptography, coding, and securities law for implementation. Ultimately, blockchain holds the potential to tip the role of the arts toward democratic availability through collective ownership structures or toward further commodification of cultural assets.

David Serra

When Satoshi Nakamoto released Bitcoin in 2009, the world became aware of blockchain technology, but cryptocurrency is just one of the applications that can be powered by blockchain technology. Blockchain technology2 is a distributed database where many copies of the data are replicated and synchronized. Don Tapscott (2016) describes the blockchain as “an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value. [...] Blockchain differs from traditional ledgers of transactions in that it is decentralized, public and encrypted.”3Technology is becoming an integral part of creating, displaying, signing, and selling art. How is blockchain involved in the cycle of a work of art?In the following interview with Ruth Catlow (London, 1968), artist-theorist, curator, and co-founder and Artistic Director of Furtherfield4 and DECAL5(Decentralised Arts Lab), reflects on blockchain’s6 place in the art world and the importance of decentralized structures in art and economics. Focussing on critical investigations of digital and networked technologies and their emancipatory potential, she offers interesting insights into new economies, and suggests concepts for alternative ways to create new art practices.

Jason Teutsch, Vitalik Buterin, Christopher L. Brown

Ethereum has emerged as a dynamic platform for exchanging cryptocurrency tokens. While token crowdsales cannot simultaneously guarantee buyers both certainty of valuation and certainty of participation, we show that if each token buyer specifies a desired purchase quantity at each valuation then everyone can successfully participate. Our implementation introduces smart contract techniques which recruit outside participants in order to circumvent computational complexity barriers.

Elena Sidorova

The paper addresses the issue of digitalization of the contemporary art market. It analyzes key features of today’s online art market and discusses three technological innovations—cryptocurrency, blockchain, and artificial intelligence—that have the potential to contribute to the further development and growth of online art trade. The paper demonstrates that whereas cyberspace attracts new talent and great business ideas intended to make global art commerce more versatile and efficient, online art market players alongside with providers of online art market data and analytics offer interesting avenues of future research in this sector.

Stan Sater, Rachel Wright

Museums are places that bring people together from all walks of life to explore, consume, and interact with all types of curated art. These interactions don’t always take place within the walls of a museum. Instead, people may access art and exhibitions through other mediums, such as the Internet, via publications and consumer products. Museums extend their reach with licenses that grant the right to reproduce images of artwork in their collections and utilize data sets about the works themselves. We see the opportunity for data sharing between museums moving their historical records to a distributed ledger backed by blockchain technology. In this format, ownership and copyright data will be complete and shared among cultural institutions and the public facilitating greater access, exploration, and connection of cultural objects and works of art. This Discussion is a conversation on why we see the possibility from a personal perspective and is a broader debate on questions worth addressing individually.

Ellie Rennie, Jason Potts, Ana Pochesneva

Overview:Industries that rely on digital payments (especially micro-transactions) and complex contracting between parties stand to gain the most from the arrival of blockchain technology. In addition, the ability to authenticate a work as it passes from one buyer to the next, and to generate unique digital works, will be a boon to those industries where scarcity is valued. We conclude that the creative industries would benefit greatly from this new economic infrastructure – possibly more than any other segment of the economy. However, the embryonic blockchain-enabled creative economy has a difficult road ahead. Old industry incumbents and new technology platforms alike have failed to demonstrate a willingness to embrace an open and accessible ‘internet of value’ (as blockchain is known). Without concerted efforts to coordinate practitioners and stakeholders (arts organisations, creative firms, funding bodies, collecting societies and others), including shared digital infrastructures and open standards, these benefits may never be realised. We propose what we are calling an ‘industry utility’ approach to cultural policy. An industry utility is a shared infrastructure built to support and grow a segment of the economy. In this scenario, Australia’s cultural institutions would cooperate in the development and use of a shared blockchain infrastructure for the creative industries. We provide some initial ideas on what that might look like for creative practitioners and show how such an approach would position Australia as a leader in the creative economy.Highlights:An overview of distributed ledger technology, including smart contracts.Examples of the way experimentation is already taking place with these technologies in the cultural and creative industries (weighted towards the music and screen sectors where most developments have occurred to date).Consideration of the role that Australia’s cultural institutions might play in the development of a creative industries blockchain economy.