Analyzing Cryptocurrencies

11 Pages Posted: 30 Dec 2019

See all articles by Xiaofan Li

Xiaofan Li

University of Texas at Austin - Department of Information, Risk and Operations Management

Andrew B. Whinston

University of Texas at Austin - Department of Information, Risk and Operations Management

Date Written: October 25, 2019

Abstract

Cryptocurrencies, such as Bitcoin, have been an important factor in some economic activities. For example, Bitcoin is the main payment method for ransomware attackers and retailers on the Darknet. It is therefore useful to understand the features of cryptocurrencies and their economic implications. In this research, we use bitcoin, Ether, and XRP, the three cryptocurrencies with the highest market values as of this writing, as well as Libra, which is forthcoming and topical, as examples to analyze their features. Specifically, we argue that these cryptocurrencies are fundamentally different due to differences in the following factors: the identity management of their ledger writers, their consensus algorithms, and their coin supply. We discuss how these factors determine cryptocurrency performance, including security, privacy, and financial influence. We also discuss potential research topics around these cryptocurrencies that are still open.

Keywords: Blockchain, Cryptocurrency, Bitcoin, XRP, Ether, Libra

Suggested Citation

Li, Xiaofan and Whinston, Andrew B., Analyzing Cryptocurrencies (October 25, 2019). Available at SSRN: https://ssrn.com/abstract=3500276 or http://dx.doi.org/10.2139/ssrn.3500276

Xiaofan Li (Contact Author)

University of Texas at Austin - Department of Information, Risk and Operations Management ( email )

CBA 5.202
Austin, TX 78712
United States

Andrew B. Whinston

University of Texas at Austin - Department of Information, Risk and Operations Management ( email )

CBA 5.202
Austin, TX 78712
United States
512-471-8879 (Phone)

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