This thesis examines the roots of price instability in cryptoasset markets. Using daily data from 2016 to 2022, it estimates volatility for Ethereum, XRP, Doge- coin, Stellar Lumen and Litecoin with the Garman-Klass range-based estima- tor. This exploits intraday price information that is usually not taken into con- sideration when using return-based metrics. A log-log two-stage least-squares framework relates volatility to exchange volume, on-chain transfers, active ad- dresses, stable-coin supply, own price, lagged volatility and Bitcoin's domi- nance, instrumenting endogenous variables with hash rate, circulating supply and traditional-market indicators. Results show that volatility of alternative cryptoassets reacts only weakly to conventional fundamentals: for Ethereum, user activity and stablecoin liquidity temper volatility while speculative trad- ing, price surges and persistence amplify it; for XRP and Dogecoin, none of the tested drivers matter besides persistence; for Stellar Lumen and Litecoin, Bit- coin dominance slightly stabilizes prices. Overall explanatory power is modest, suggesting that other undefined e!ects drive the volatility in alternative cryp- toasset markets. The study pioneers the combination of range-based volatility and instrumental-variables analysis in this field and...
Este trabajo de Fin de Grado pretende abordar los desafíos y oportunidades relacionados con la privacidad y el anonimato en la adopción de Monedas Digitales de banco Central (CBDC), con un enfoque particular en el Euro Digital (Moneda Digital propuesta por el Banco Central Europeo (BCE)). Las CBDC representan una innovación disruptiva en el sistema financiero tal y como lo conocemos, ofreciendo una visión alternativa al efectivo tradicional, teniendo un impacto considerable en la privacidad de los usuarios, la transparencia financiera y el marco regulatorio vigente. En el contexto del creciente interés global en las CBDC, el Banco Central Europeo busca equilibrar la protección de datos personales y la transparencia financiera en un sistema que pueda transformar la dinámica del sistema financiero europeo. El objetivo de este trabajo es analizar como las CBDC pueden ser diseñadas e implementadas para maximizar los beneficios, tratando de mitigar los riesgos asociados a la privacidad y transparencia financiera. Los objetivos específicos incluyen: 1. Examinar el concepto y evolución de las CBDC. 2. Identificar desafíos y oportunidades relacionadas con la privacidad y el anonimato. 3. Analizar el marco regulatorio europeo aplicable al Euro Digital. 4. Comparar diseños alternativos de CBDC con énfasis en privacidad. 5. Proponer recomendaciones que equilibren privacidad y transparencia. 6. Explorar y analizar casos de uso alternativos que preserven el anonimato en las operaciones. En este trabajo se lleva a cabo un análisis exhaustivo del impacto de las CBDC en la privacidad de los usuarios, teniendo en cuenta diferentes factores como la tecnología empleada, las políticas regulatorias y las expectativas sociales. Se hace especial énfasis en el desafío de proteger los datos personales de los usuarios en un entorno digital que exige constantemente un alto grado de trazabilidad y cumplimiento normativo. También se explora cómo otras jurisdicciones han abordado estos retos, analizando casos concretos como el yuan digital en China o proyectos piloto en países nórdicos, con el objetivo de identificar lecciones aprendidas y diferentes estrategias aplicables al marco europeo. Además, se investiga acerca de innovaciones tecnológicas como los sistemas de privacidad de conocimiento cero (zero-knowledge proofs) y su utilidad para proteger la identidad el usuario sin comprometer la transparencia. Finalmente se proponen una serie de recomendaciones para el diseño e implantación del Euro Digital, priorizando un equilibrio entre privacidad y transparencia, sugiriendo la creación de un marco regulatorio flexible que permita realizar adaptaciones conforme se desarrollen este tipo de tecnologías y evolucionen las necesidades económicas y sociales. El trabajo concluye que el diseño e implementación del Euro Digital representan una oportunidad clave para modernizar el sistema financiero europeo, equilibrando innovación y respeto por los derechos fundamentales. Si bien las CBDC ofrecen beneficios como eficiencia y trazabilidad, también plantean desafíos significativos en términos de privacidad y anonimato. Este trabajo resalta la necesidad de adoptar un modelo equilibrado que, mediante tecnologías avanzadas y marcos normativos adecuados, proteja la privacidad de los usuarios sin tener que comprometer la transparencia necesaria para la seguridad financiera. Utilizando este enfoque se puede fortalecer la confianza del usuario en el Euro Digital y así consolidar su papel como un referente en el ámbito de las monedas digitales a nivel mundial. ABSTRACT This Final Degree Project aims to address the challenges and opportunities related to privacy and anonymity in the adoption of Central Bank Digital Currencies (CBDCs), with a particular focus on the Digital Euro (the digital currency proposed by the European Central Bank, ECB). CBDCs represent a disruptive innovation in the financial system as we know it, offering an alternative vision to traditional cash and having a considerable impact on user privacy, financial transparency, and the existing regulatory framework. In the context of growing global interest in CBDCs, the European Central Bank seeks to balance personal data protection and financial transparency within a system capable of transforming the dynamics of the European financial system. The objective of this study is to analyze how CBDCs can be designed and implemented to maximize their benefits while mitigating risks associated with privacy and financial transparency. The specific objectives include: 1. Examining the concept and evolution of CBDCs. 2. Identifying challenges and opportunities related to privacy and anonymity. 3. Analyzing the European regulatory framework applicable to the Digital Euro. 4. Comparing alternative CBDC designs with an emphasis on privacy. 5. Proposing recommendations to balance privacy and transparency. 6. Exploring and analyzing alternative use cases that preserve transaction anonymity. This study conducts a thorough analysis of the impact of CBDCs on user privacy, considering various factors such as the technology employed, regulatory policies, and social expectations. Special emphasis is placed on the challenge of protecting user data in a digital environment that constantly demands high levels of traceability and regulatory compliance. The study also explores how other jurisdictions have addressed these challenges, analyzing specific cases such as the digital yuan in China and pilot projects in Nordic countries, with the aim of identifying lessons learned and different strategies applicable to the European framework. Additionally, it investigates technological innovations such as zero-knowledge proof systems and their utility in protecting user identity without compromising transparency. Finally, a series of recommendations are proposed for the design and implementation of the Digital Euro, prioritizing a balance between privacy and transparency. These include the creation of a flexible regulatory framework that allows for adaptations as these technologies develop and as economic and social needs evolve. The study concludes that the design and implementation of the Digital Euro represent a key opportunity to modernize the European financial system by balancing innovation and respect for fundamental rights. While CBDCs offer benefits such as efficiency and traceability, they also pose significant challenges in terms of privacy and anonymity. This work highlights the need to adopt a balanced model that, through advanced technologies and appropriate regulatory frameworks, protects user privacy without compromising the transparency necessary for financial security. By following this approach, user trust in the Digital Euro can be strengthened, consolidating its role as a global reference in the field of digital currencies.
Juan Carlos López-Pimentel, Carolina Del-Valle-Soto, Leonardo J. Valdivia, Raúl Monroy
Immutability is one of the main characteristics of Blockchain. However, most software development is not static. This dilemma, among others, has caused a new branch of blockchain-oriented software engineering. This paper emphasizes the importance of the early phases of software development before deploying blockchain-based software. It follows case-based research to illustrate the implications of smart contracts designed in the early phases without including all requirements. The paper presents a digital identity case designed within a microservice architecture. We show two stages: an initial design and an upgrading requirement, which causes considerable changes in the architecture. The case is analyzed from three different perspectives: 1) Economic, finding that re-deploying smart contracts does not implicate considerable cost; 2) Computational perspective, finding that it generates various implications: smart contract purpose duplication, storage wastage, failure to recognize the original smart contract, cascade dependency repercussion, and migration problems; and 3) Interconnected effect, a simple change, required for upgrading smart contracts, generates broad collateral repercussions in both on-chain (within the blockchain) and off-chain.
The rapid expansion of cryptocurrency markets has fundamentally challenged the architecture of traditional tax systems.As digital asset transactions increasingly bypass institutional oversight, national and international tax frameworks remain fragmented, reactive, and insufficient.This paper critically examines the structural, technological, and policy-driven barriers that inhibit global tax systems from effectively regulating cryptocurrency conversions, particularly the transformation of digital assets into fiat currencies.Drawing upon a comparative analysis of tax regimes across the United States, European Union, United Arab Emirates, and Singapore, this study identifies systemic inconsistencies in the classification of crypto assets, the recognition of taxable events, and the enforcement of cross-border reporting standards.The research highlights the growing prevalence of decentralized finance (DeFi) platforms, peer-to-peer exchanges, and privacy-enhancing technologies, which further complicate tax compliance and erode the ability of authorities to trace digital wealth.Using an interdisciplinary framework grounded in regulatory arbitrage theory and institutional economics, the paper explores the interplay between policy inertia, technological complexity, and jurisdictional competition.It critically assesses the limitations of emerging efforts such as the OECD's Crypto-Asset Reporting Framework (CARF) and FATF's Travel Rule, arguing that without coordinated global standards, crypto tax evasion will persist through legal voids and regulatory arbitrage.The study concludes with a set of policy imperatives for achieving equitable, technologically feasible, and internationally harmonized approaches to digital asset taxation-ensuring tax integrity without stifling innovation or violating digital privacy rights.
This article analyzes the feasibility of implementing smart contracts in the public administration system of the Republic of Armenia. Drawing upon theories of institutional economics, transaction cost economics, and innovation diffusion, the study conducts both theoretical and practical analyses. Based on international experience, the most impactful areas for implementation – public procurement, social services, and budgetary oversight – are identified. A quantitative model estimates potential cost savings ranging from 1.5% to 3% if smart contracts are adopted. Strategic policy recommendations are proposed, targeting legal, technological, and institutional reforms. The findings suggest that phased implementation is both realistic and technologically sound.
Mirko Duradoni, Elena Serritella, Martina Bellotti, Alessio Luciano Licata · 5 authors
The technological revolution of the last decades has revolutionized economic interactions, introducing new paradigms like e‐banking and cryptocurrencies. Although the literature has questioned the antecedents associated with the use of cryptocurrencies and, in particular, the attitudes and beliefs underlying them, there is still a lack of a robust, multidimensional tool to measure beliefs about cryptocurrencies. Therefore, the aim of the study is to preliminarily validate a brand‐new scale for a comprehensive assessment of beliefs related to cryptocurrencies: the scale of beliefs about cryptocurrencies (SBaC). The first version of the scale was tested on 395 Italian‐speaking participants (53.1% were women, mean age 27.44 years, SD = 11.03). Thirteen percent of the sample also held cryptocurrencies at the time of completing the questionnaire. The results of the exploratory factor analysis (EFA) showed that the SBaC, with a total of 12 items, has four factors: (i) self‐fulfillment, related to achieving independence and goals through cryptocurrencies; (ii) investment, indicating potential profitability; (iii) cryptocurrencies as a medium of exchange, as an alternative for transactions; and (iv) locus of control, related to individual attribution of success or failure in the crypto market. The results of the confirmatory factor analysis (CFA) on an independent sample ( N = 133, mean age = 34.47, SD = 11.79) confirm the four‐factor structure of the scale. The correlation analysis showed that positive beliefs toward cryptocurrencies as a medium of exchange and as investments are significantly correlated with willingness to engage and hold cryptocurrencies. Internal locus of control negatively correlates with willingness to engage with cryptocurrencies but does not significantly affect the amount held or investment willingness. Social influence plays a role in shaping perceptions of cryptocurrencies as a medium of exchange and investment but does not significantly impact locus of control or self‐fulfillment. Self‐fulfillment is positively correlated with willingness to engage with cryptocurrencies and investment willingness, albeit with weaker correlations. This study showed that the SBaC is a valuable tool for assessing cryptocurrencies’ beliefs, predicting behavioral intentions, and understanding cognitive processes driving engagement with digital currencies.
We apply network science methodologies to address analytical challenges in blockchain and Decentralized Finance (DeFi). The pseudonymous nature of Bitcoin and the complex, multi-token interactions of Ethereum-based protocols require tools that go beyond traditional blockchain analysis. We present three network-based frameworks for understanding actor behavior and financial activities in these decentralized systems. First, for Bitcoin, we introduce a money flow representation learning approach that encodes taint networks into graph embeddings to identify entities across multiple address clusters. Second, we analyze DeFi activity using ego network motif mining, which extracts recurring structures from token transfer networks. This method can infer transaction methods (e.g., deposits, swaps, borrowing) and characterizes user behavior, even when labels are incomplete or noisy. Third, we model multi-token interactions through a Multilayer Token Network that links cross-token flows. Using PageRank-CheiRank Trade Balance, we quantify accumulation versus dispersion strategies and uncover temporal shifts in trading behavior, illustrated through entities such as Alameda Research. Together, these frameworks show how network topology, motifs, and multilayer flows transform raw blockchain data into interpretable insights on identity, function, and financial strategy.
Di Perna, Vincenzo Paolo, Foderaro, Michele, Fabris, Francesco, Bernardo, Marco
Blockchain technology is set to transform economics and finance by enabling secure, transparent, and decentralized transactions. Some significant examples in this sense are cryptocurrencies and decentralized finance, which leverage blockchain technology to provide fast, low-cost financial services without a central authority, as well as the tokenization of finance, already forecast by Larry Fink, CEO of BlackRock. As crypto economies and blockchain applications gain global relevance, the need to measure and assess their efficiency is becoming increasingly important. While blockchain efficiency is often evaluated in terms of transactions per second or energy consumption, cryptocurrency efficiency is implicitly assessed through various indexes, such as capitalization, price trends, average transaction value, mining profitability, and others. What is lacking is an index capable of comprehensively and coherently describing the actual functioning of a crypto economic system, accounting for its key economic characteristics – such as supplymechanisms and token distribution – and the level of user participation within the specific crypto economy. In this study, we introduce a new theoretical framework based on Shannon entropy to assess the economic efficiency of a cryptocurrency through the Entropy Balance index (EB-index). Our approach integrates on-chain parameters – sourced from Coin Metrics® – by mapping them to economic quality attributes. To illustrate how our entropy-based approach works, we apply it to two distinct sets of attributes across six leading cryptocurrencies by market capitalization and use-case diversity: Bitcoin, Ethereum, Ripple, USD Coin, Dogecoin, and Cardano. For either set of attributes, the six EB-index values provide us with a comprehensive way of comparing the considered cryptocurrencies from an economic efficiency viewpoint. Our approach is fully customizable with respect to the selection of attributes as well as their weights.
This thesis analyzes liquidity provision strategies in decentralized finance (DeFi), focusing on Uniswap V3's automated market maker protocol. The research addresses the challenge of developing effective frameworks for liquidity providers operating in decentralized exchanges, where participants face unique risks including impermanent loss and strategic positioning decisions. Using empirical analysis of on-chain data, the study examines different liquidity provision approaches across various asset pairs and fee tiers to establish quantitative frameworks for strategic decision-making in DeFi markets.
This paper evaluates the transformative impact of Distributed Ledger Technology (DLT), commonly known as blockchain, across core financial services sectors, including capital markets, cross-border payments, trade finance, and Real-World Asset (RWA) tokenization. The research establishes that DLT drives significant operational efficiencies by fundamentally changing the mechanisms of trust and settlement. This technological shift is characterized not by evolutionary improvement, but by a foundational restructuring of transaction governance. Synthetic quantitative analysis, supported by empirical evidence, reveals profound efficiency gains. The mechanism of atomic settlement (T+0) via smart contracts reduces post-trade operational overhead by an estimated 50% and virtually eliminates systemic counterparty risk by making the exchange of assets and cash simultaneous. Furthermore, DLT-based cross-border payments promise cost reductions up to 80% compared to traditional correspondent banking models, drastically improving speed and transparency. This operational success is corroborated by empirical studies showing a positive correlation between DLT adoption and enhanced bank financial performance metrics, specifically Return on Assets (ROA) and Return on Equity (ROE). Despite substantial technical maturity, scalable institutional adoption is primarily constrained by non-technical barriers. The intrinsic conflict between DLT’s immutability and data privacy mandates, particularly the European Union's General Data Protection Regulation (GDPR) Right to Erasure (Articles 16 and 17), remains a significant legal challenge. Technical hurdles center on scalability and the fragmented liquidity caused by isolated, incompatible DLT ecosystems, leading to a critical interoperability crisis. The analysis concludes that DLT adoption in finance is concentrated in private, permissioned networks (such as Corda and Hyperledger Fabric) that prioritize institutional governance and data confidentiality. Future systemic integration requires proactive policy innovation, utilizing mechanisms like regulatory sandboxes to align distributed technological capability with existing legal and prudential requirements, thereby ensuring a controlled transition to a digital financial infrastructure.
Diese Arbeit untersucht, wie sich MicroStrategys Rolle als Bitcoin-Fonds auf die Aktienbewertung unter unterschiedlichen Marktbedingungen auswirkt und in welchem Verhältnis die Bewertung zur Höhe der gehaltenen Bitcoin-Bestände steht. Seit der Einführung der Bitcoin-Strategie im Jahr 2020 haben sich Bilanzstruktur, Marktwahrnehmung und Bewertungsdynamik des Unternehmens deutlich verändert. Diese Entwicklung wird anhand von Finanzdaten aus dem Zeitraum Q3 2020 bis Q4 2024 analysiert, die aus professionellen Finanzsystemen wie LSEG Workspace stammen. Die Daten umfassen historische Preisinformationen, Marktkapitalisierung und Bilanzauszüge und wurden zur Visualisierung in Excel aufbereitet. Vergleichende Kursverläufe zwischen Bitcoin und MicroStrategy wurden direkt in LSEG und Bloomberg erstellt.Zur Bewertung werden Kennzahlen wie das market capitalization-to-net asset value multiple (mNAV) sowie das Kurs-Buchwert-Verhältnis (P/B) herangezogen, wobei sich mNAV als aussagekräftiger erweist, insbesondere angesichts der Einschränkungen der bilanziellen Behandlung digitaler Vermögenswerte. Die empirische Analyse auf Basis von Zeitreihen, Bewertungsmultiplikatoren, Preisbeziehungen und marktrelevanten Ereignissen zeigt, dass MicroStrategy kein statisches Bewertungsverhältnis zu seinen Bitcoin-Beständen aufrechterhält. Vielmehr handelt die Aktie in Bullenmärkten häufig mit deutlichen Bewertungsaufschlägen, während in Bärenmärkten eher Abschläge oder Bewertungen nahe dem inneren Wert beobachtet werden. Dies deutet darauf hin, dass MicroStrategy oft als High-Beta-Proxy für Bitcoin agiert und nicht durchgehend als klassischer Fonds, der strikt zum NAV notiert.Obwohl die Korrelation zum Bitcoin-Kurs hoch ist, zeigen bestimmte Marktzyklen, dass MicroStrategy Kursanstiege häufig anführt und sich dabei überproportional bewegt, insbesondere in Aufwärtsphasen, was sich in teils sehr hohen Bewertungen niederschlägt. Abschließend erfolgt ein Vergleich mit dem Grayscale Bitcoin Trust (GBTC). Obwohl es sich hierbei um einen regulierten Bitcoin-Fonds handelt und MicroStrategy ein börsennotiertes Unternehmen ist, zeigt der Vergleich deutliche Parallelen in der Bewertungslogik. Dies erlaubt zusätzliche Einblicke in strukturelle und verhaltensbezogene Gemeinsamkeiten beider Vehikel.
Jan 1, 2025·Proceedings of the ... Annual Hawaii International Conference on System Sciences/Proceedings of the Annual Hawaii International Conference on System Sciences
Thousands of cryptocurrency coins and tokens have been introduced in recent years, with each purporting to offer a unique take on disrupting traditional financial instruments. Most fail to attract significant investment, but some grow quite valuable for at least a short time. This paper focuses on so-called "crypto unicorns'', which reach a market capitalization of at least $1 billion at some point during their lifetimes. 37 coins and 139 tokens have reached unicorn status. However, only 15 coins and 35 tokens retain market capitalizations exceeding $1 billion at end of our study, with 6 coins and 31 tokens falling below $100 million. We empirically examine the factors that influence the relative success or failure of crypto unicorns. Using regression analysis, we find that bitcoin price, the type of service offered by the coin or token, having an ICO and social media activity all affect success.
Abstract This paper quantitatively analyses the development status and market share of cryptocurrencies by collecting relevant information and explores the correlation between the cryptocurrency market and the performance of China’s financial market and financial market pressure through the correlation analysis method. Using VAR model impulse analysis to portray the dynamic relationship between cryptocurrencies and the financial market during unexpected events can help show the risk changes of the cryptocurrency market more intuitively. The analysis shows that cryptocurrencies have entered a stage of explosive development, and by 2023, their overall market value will reach about $3 trillion. Among them, Bitcoin has a market share of 39.8%. The correlation coefficients of Bitcoin, Litecoin, Ethereum, and Ripple with the Chinese financial market are -0.0138, −0.0225, −0.0114, and −0.0143, which are negatively correlated. There is a correlation between cryptocurrencies and the impact of market volatility.
The rise of cryptocurrencies, powered by blockchain technology, shifts trust from centralized institutions to technology itself. However, the drivers of trust in cryptocurrency adoption (CA) remain unclear, with existing models like commitment‐trust theory, trust in technology, and digital trust insufficiently addressing decentralized systems. To bridge this gap, this study integrates the task‐technology fit (TTF) framework and five‐factor theory (FFT) into a comprehensive cryptocurrency trust model. TTF explains how blockchain features—security, transparency, traceability, price value, and transaction speed—impact technology characteristics (TCs), while FFT captures user characteristics (UCs), including psychological and behavioral dimensions, essential for trust development. Analyzing survey data from 200 participants using structural equation modeling (SEM), the findings highlight the mediating role of crypto trust (CT) between TC, UC, and external environmental factors (EX) in driving CA. CT mitigates concerns about fraud, security breaches, and reliability, transforming technological and individual readiness into adoption, particularly in unregulated markets like Vietnam. This study updates trust frameworks by integrating TTF and FFT, emphasizing the need for trust‐building strategies, technological transparency, and regulatory clarity. In particular, the findings underscore that clear, supportive, and consistent regulatory policies are essential for legitimizing cryptocurrency use, reducing uncertainty, and indirectly fostering user trust. These insights provide concrete policy directions for governments seeking to enhance adoption in decentralized financial systems while ensuring public protection and market stability.