2nd Global Cryptoasset Benchmarking Study

Abstract

It is dedicated to the study of innovative instruments, channels, and systems emerging outside of traditional finance. This includes, among others, crowdfunding, marketplace lending, alternative credit and investment analytics, alternative payment systems, cryptoassets, distributed ledger technology (e.g. blockchain) as well as related regulations and regulatory innovations (e.g. sandboxes and RegTech).

Global drivers of cryptocurrency infrastructure adoption

“…Bitcoin nodes) are primarily being driven by cryptocurrency miners vying to reap the financial rewards associated with mining bitcoins. Hence, we explore if bitcoin mining is a major driver of adoption of our variables, by regressing a bitcoin mining country indicator variable for countries identified by the Cambridge Centre for Alternative Finance's two versions of the Global Cryptocurrency Benchmarking Study (Hileman and Rauchs 2017;Rauchs et al 2018) as having medium-to-large scale mining operations, and additionally find no significant effect in our robustness tests (Tables 9 and 10, Model 5). We include estimates of mining intensity (in MW) and do not find any significant effect in our robustness tests (Tables 9 and 10, Model 6).…”

“…We attribute this to operation of Bitcoin nodes being driven by other than purely financial incentives and rewards to mine bitcoins, while this may still be a contributing factor. Bitcoin mining facilities are highly concentrated in certain countries with cheap and reliable electricity, cold climate and friendly regulatory environment (e.g., Rauchs et al 2018 identify only 128 mining facilities worldwide, where only 7 countries are mining more than 40 MW whereas 1.7GW have been identified worldwide), whereas nodes are less concentrated. In fact, Miller et al (2018) find only 2% of nodes on the Bitcoin network to account for three quarters of the mining power.…”

“…One of the touted benefits of cryptocurrencies in the financial literature has been in enabling diversification (Bouri et al 2019a) or as a hedge against equity markets (Bouri et al 2019b), although some studies have found them to be a weak hedge for stock markets (Kliber et al 2019;Shahzad et al 2019). Certainly bitcoins are held due to their speculative nature (Rauchs et al 2018;Baur et al 2018b), in congruence with the reported effects of our high-risk willingness variable, in addition to serving as an alternative investment (Glaser et al 2014). We test to see if Bitcoin infrastructure has seen an uptick worldwide as a hedge for low returns in national stock markets.…”

The Bitcoin’s Network Effects Paradox—A Time Series Analysis

“…Moreover, it has significant implications for electronic commerce practitioners concerning their decision-making process about Bitcoin, by contributing to a better understanding of the networked phenomena that appear in the Bitcoin market and thus reducing their reservedness towards its adoption and use. The number of merchants may show an increasing trend [53], but Bitcoin is still in the early adoption stage [31] and awareness about Bitcoin should expand in order the early majority stage occurs [54]. The understanding of the network effects' phenomena and network externalities that appear in electronic markets conduces to the awareness of the transformational role of Bitcoin and the rest cryptocurrencies, as well.…”

Bitcoin and Its Energy Usage: Existing Approaches, Important Opinions, Current Trends, and Future Challenges

“…The authors of [13] believe that 'BTC is greener than you think' when they compare it with fiat money transfers where a transaction passes through so many data centers for verification and fraud detection before the user actually gets the money, thus making fiat transactions as power hungry as BTC [14]. Likewise, a recent GLOBAL CRYPTOASSET BENCHMARKING STUDY [15] points out that the share of using renewable energy sources in mining is around 28%, however, this percentage might vary from one facility to another. The renewable energy (such as hydroelectric power) usage remains higher in facilities (ex.…”