Bitcoin and Arrival of Cryptocurrencies (Beyond Bitcoin, Chapter 4)
Beyond Bitcoin: The Economics of Digital Currencies and Blockchain Technologies, 2nd ed, forthcoming
33 Pages Posted: 9 Mar 2018 Last revised: 3 Sep 2021
Date Written: May 28, 2021
In this chapter, we discuss Bitcoin’s mechanism. 4.1. The double spending problem. 4.2. A brief overview of Bitcoin’s design. 4.3. Not the first one -- predecessors of Bitcoin. 4.4. New challenges created by Bitcoin design. 4.4.1. Mining arms race and electricity consumption. 4.4.2. Mining pools and centralization propensity. 4.4.3. Threat of attacks. 4.4.4. Deflationary pressure. 4.4.5. Governance. 4.5. How do Bitcoin’s attributes compare to earlier money?
For Chapter 1 (Introduction), see https://ssrn.com/abstract=3135021.
For Chapter 2 (Means of Exchange: Ever-present Competition), see https://ssrn.com/abstract=3135028.
For Chapter 3 (Platform-based Currencies), see https://ssrn.com/abstract=3135030.
For Chapter 4 (Bitcoin and Emergence of Cryptocurrencies), see https://ssrn.com/abstract=3135043.
For Chapter 5 (The Rich Land of Crypto), see https://ssrn.com/abstract=3135057.
For Chapter 6 (Smart Contracts and Blockchain), see https://ssrn.com/abstract=3894110.
For Chapter 7 (Enterprise Blockchains), see https://ssrn.com/abstract=3894117.
For Chapter 8 (Conclusions: Future Full of Possibilities), see https://ssrn.com/abstract=3894118.
Keywords: Bitcoin, digital currencies, network effects, cryptocurrencies
JEL Classification: D8, E4, G2, O3, D83, D84, E42, G21, G23, O33
Suggested Citation: Suggested Citation