Blockchain Papers

Tibor Neugebauer, Yilong Xu

No abstract is available for this record.

Thomas K. Birrer, Dennis Amstutz, Patrick Wenger

No abstract is available for this record.

Unyong Pyo

We consider an economy endowed with two rival currencies: Dollar and Bitcoin, both of which inherently carry no value at all. While the Dollar is maintained by the U.S. Fed with target inflation, the supply in Bitcoin tapers to zero over time. We present a model with underlying pricing equations that a submartingale prevails on Bitcoin prices. Hence, Bitcoin prices appreciate over time. Absence of mutual impatience in Dollars leads to Bitcoin speculation. The main source of Bitcoin appreciation comes from the high inflation in Dollar over that in Bitcoin. We also show Bitcoin speculation and equilibrium to Bitcoin persistence over competing with Dollars.

Jonathan Chiu, Emre Ozdenoren, Kathy Yuan, Shengxing Zhang

No abstract is available for this record.

Henri Kouam

No abstract is available for this record.

Dušan Vujović

Digital money era is in full swing. It has already changed the structure of the global monetary system. Like industrial revolutions of the past few centuries, the digital money revolution is based on: (i) new IT and accounting technology (crypto algorithms, distributed ledger technology, internet, and deep penetration of smart phones), and (ii) demand for greater financial inclusion, and for more efficient financial services. The advent of unregulated private mobile money with more than 4 billion users and trillions of dollars in financial transaction has awakened fears of monetary system instability and dwindling traction of the old monetary and fiscal policy. The response has been a relentless effort by more than 100 central banks around the world to develop a public digital currency. Retail CBDCs issued by central banks will be available to everybody to provide stability and liquidity to the financial system in times of need. There will be uncertainties and challenges regarding the conduct of monetary and fiscal policy. Many expected improvements will come with inevitable tradeoffs in the speed and effectiveness of monetary policy transmission, and in achieving greater fiscal transparency without violating individual rights and privacy. Serbia will benefit greatly from improved fiscal transparency and reduced shadow economy associated with digital money revolution. At the same time it will be vulnerable to currency substitution pressures from future digital Euro and reduced traction of monetary policy in the presence of multiple e-money flows. Timely legal preparations for bank-led mobile money and Central Bank digital cash, and applied research of complex future policy risks is strongly advised.

Gordon Liao, Thomas Hadeed, Ziming Zeng

No abstract is available for this record.

Sankalp Chenna

Decentralized finance (Defi) has the potential to be one of the most significant advances in the burgeoning digital economy. It can change financial intermediation, and its applications have the potential to democratize finance by providing a comparable level of competition among economic service and product suppliers. It aims to change the present centralized global financial infrastructure by proposing an internet-based decentralized approach based on open-source protocols rather than traditional financial mediators. Defi applications aim to provide traditional financial services, also known as Centralized Finance, in complete epicondyles, global, and transparent manner by embracing the vision of a financial system that operates without any conduits, such as banks, insurance companies, or financial institutions and is solely powered by the power of smart contracts. Defi is anticipated to have a substantial influence on how banks function in the future, with the potential to modify the structure of the whole financial system on a global scale. We will explore how it will disrupt society and the economy.

Gregory Parker

No abstract is available for this record.

Peter J. Phillips, Gabriela Pohl

No abstract is available for this record.

Rashad Ahmed, Iñaki Aldasoro, Chanelle Duley

No abstract is available for this record.

Mykola Pinchuk

This paper examines the response of major cryptocurrencies to macroeconomic news announcements (MNA). While other cryptocurrencies exhibit no reaction to major MNA, Bitcoin responds negatively to inflation surprise. Price of Bitcoin decreases by 24 bps in response to a 1 standard deviation inflationary surprise. This reaction is inconsistent with widely-held beliefs of practitioners that Bitcoin can hedge inflation. I do not find support for the hypothesis that the negative response of Bitcoin to inflation is due to its negative exposure to interest rates. Instead, I find support for the hypothesis that Bitcoin is strongly affected by the shift in consumption-savings decisions, driven by the rise in inflation. Consistent with this view, Bitcoin has negative exposure to a proxy for the consumption-savings ratio.

Jonathan Chiu, Thorsten V. Koeppl, Hanna Yu, Shengxing Zhang

No abstract is available for this record.

Atis Elsts

No abstract is available for this record.

Jui‐Cheng Hung, Hung‐Chun Liu, J. Jimmy Yang

No abstract is available for this record.

Osama Liaqat, Kehkashan Nizam, Jahanzaib Alvi

No abstract is available for this record.

Jying‐Nan Wang, Samuel A. Vigne, Hung‐Chun Liu, Yuan‐Teng Hsu

No abstract is available for this record.

Runhuan Feng, Mao Li

No abstract is available for this record.

Dong Huang, William N. Goetzmann

Using transaction data from a large non-fungible token (NFT) trading platform, this paper examines how the behavioral bias of selection-neglect interacts with extrapolative beliefs, accelerating the boom and delaying the crash in the recent NFT bubble.We show that the pricevolume relationship is consistent with extrapolative beliefs about increasing prices which were plausibly triggered by a macroeconomic shock.We test the hypothesis that agents prone to selection-neglect formed even more optimistic beliefs and traded more aggressively than their counterparts during the boom.When liquidity for NFTs declined, observed NFT prices were subject to severe selection bias due in part to seller loss aversion delaying the onset of the crash.Finally, we show that market participants with sophisticated bidding behavior were less subject to selection bias and performed better.

Kyoung Jin Choi, Junkee Jeon, Byung Hwa Lim

No abstract is available for this record.

Jason Potts

No abstract is available for this record.

Amadae, S. M.

This chapter discusses cryptocurrency, distributed ledger technology and blockchain tokens within the context of technological innovation, the history of money and accounting practices, and their multiple functionalities beyond those of standard currencies. This discussion is motivated by the design of cryptocurrencies for specific community needs, and to reflect anti-rival, positive sum value.

Urban J. Jermann

This paper presents a dynamic equilibrium model of Ethereum's macroeconomy. The model captures agents' decisions regarding ETH holdings, staking, and the use of blockspace on both the Ethereum mainnet and Layer 2 networks. The ETH supply evolves according to protocol rules. The model's long-run behavior is characterized analytically, and key properties of the staking share and the price of ETH are derived. The model is calibrated using market data on ETH prices and transaction fees. Alternative issuance curves are evaluated for their effectiveness in managing staking levels.

Brian Judge, Barry Eichengreen, John Zysman

In response to new developments in financial structure and technology, and galvanized by recent eruptions of volatility, officials from Washington to London to Brussels are grappling with how to regulate the cluster of practices known as decentralized finance, or DeFi. This is a political as well as an economic question. This is to say, the outcome will involve interests in addition to considerations of efficiency. Although advocates of decentralized finance often invoke laudable goals like reduced costs and increased inclusion, it is worth examining what else rides those coattails.