The Size of the Crypto Economy: Calculating Market Shares of Cryptoassets, Exchanges and Mining Pools
16 Journal of Competition Law and Economics 511 (2020)
34 Pages Posted: 19 Mar 2019 Last revised: 14 Dec 2020
Date Written: March 19, 2020
As cryptoassets expand into mainstream economy, they invite heightened regulatory and investor scrutiny. A number of laws and regulations, such as antitrust (competition) laws and financial regulations, as well as investor decisions are informed by the relative economic size of cryptoassets, meaning that cryptoassets with larger market shares may become more attractive for regulation or investing. Properly measuring the economic footprint of cryptoassets, therefore, becomes imperative. However, the exercise has proven challenging for multiple reasons including unfamiliarity with the underlying technology and the role of involved actors, lack of understanding of the applicable metrics’ economic significance, and the unreliability of self-reported statistics, partly enabled by lack of regulation. Acknowledging the centrality of cryptoasset measurements in a number of regulatory and policy-making areas, and the fact that previous attempts have been incomplete, simplistic, or even plainly wrong, this paper presents the first systematic examination of the economic footprint of cryptoassets and their constituent actors. We aim to achieve a number of objectives: to introduce, identify and organize all relevant and meaningful metrics of cryptoasset market share calculation; to develop associations between metrics, and to explain their meaning, application, and limitations so that it becomes obvious in which context metrics can be useful or not, and what the potential caveats are; and to present rich, curated, and vetted data to illustrate metrics and their use in measuring cryptoasset shares in their respective markets. The result is comprehensive guidance into the size of the crypto-economy and blockchain networks.
Keywords: cryptoassets, cryptocurrencies, blockchain, bitcoin, ethereum, ripple, market shares, competition, market capitalization, realized market capitalization, antitrust, regulation, economic footprint, size, coinmetrics
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