An Analysis of Bitcoin’s Price Dynamics

The Hard-Luck Texas Town That Bet on Bitcoin—and Lost

This is the best tl;dr I could make, original reduced by 94%. (I'm a bot)
Bitmain, a Chinese company that makes specialized computers for "Mining" cryptocurrency, said it would invest $500 million in what was to be the world's largest bitcoin-mining facility at the closed Alcoa smelter, which, crucially, was still connected to massive electrical lines.
As Kyle sipped Shiner, Young remembers him talking about how Bitmain's facility could someday feature more than mining.
To optimize the chance of earning coins, the top mining operators run hundreds or thousands of miners 24/7. Imagine your electricity bill if you were constantly zapping instant oatmeal in hundreds of microwaves all day, every day.
Texas is hot and humid, which is not ideal for mining, because the computers require cooling; energy prices are about average for the US. David Yermack, an NYU finance and business professor who has studied cryptocurrency, says that other than Venezuela, where Nicolas Maduro virtually gives away electricity, "Texas is about the weirdest place I've heard for bitcoin mining."
In early January, Young heard that Bitmain would close the mining facility before it had ever gone online.
In November, central Washington-based mining company Giga Watt filed for bankruptcy, ending its multimillion-dollar plans to host miners.
Summary Source | FAQ | Feedback | Top keywords: mines#1 Bitmain#2 County#3 job#4 facility#5
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NOTICE: This thread is for discussing the submission topic. Please do not discuss the concept of the autotldr bot here.
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Towards a Functional Fee Market for Cryptocurrencies

arXiv:1901.06830
Date: 2019-01-21
Author(s): Soumya Basu, David Easley, Maureen O'Hara, Emin Gün Sirer

Link to Paper


Abstract
Blockchain-based cryptocurrencies prioritize transactions based on their fees, creating a unique kind of fee market. Empirically, this market has failed to yield stable equilibria with predictable prices for desired levels of service. We argue that this is due to the absence of a dominant strategy equilibrium in the current fee mechanism. We propose an alternative fee setting mechanism that is inspired by generalized second price auctions. The design of such a mechanism is challenging because miners can use any criteria for including transactions and can manipulate the results of the auction after seeing the proposed fees. Nonetheless, we show that our proposed protocol is free from manipulation as the number of users increases. We further show that, for a large number of users and miners, the gain from manipulation is small for all parties. This results in users proposing fees that represent their true utility and lower variance of revenue for miners. Historical analysis shows that Bitcoin users could have saved $272,528,000 USD in transaction fees while miners could have reduced the variance of fee income by an average factor of 7.4 times.

References
Akbarpour, M. and and S. Li, 2018, Credible Mechanisms, Proceedings of the 2018 ACM Conference on Economics and Computation, 371-371.
Aune, R., A. Krellenstein, M. OHara, and O. Slama, 2017, Footprints on a Blockchain: Trading and Information Leakage in Distributed Ledgers. Journal of Trading, 12 (2), page 5-13.
Bohme, R., N. Christin, B. Edelman, and T. Moore, 2015. Bitcoin: Economics, Technology, and Governance, Journal of Economic Perspectives, 29, 213-238.
Cong, L., Z. He and J. Li, 2018, Decentralized Mining in Centralized Pools, SSRN, https://ssrn.com/abstract=3143724.
Easley, D. and J. Kleinberg, 2010, Networks, Crowds and Markets, Cambridge University Press.
Easley, D., M. O’Hara and S. Basu, 2017, From Mining to Markets: The Evolution of Bitcoin Transactions Fees, Journal of Financial Economics, forthcoming.
Edelman, B. and M. Schwartz, 2010, Optimal Auction Design and Equilibrium Selection in Sponsored Search Auctions, American Economic Review, May 2010, Vol. 100, No. 2: Pages 597-602.
Eyal, I. and E. Sirer, 2014, Majority is Not Enough: Bitcoin Mining is Vulnerable. In Financial Cryptography and Data Security, Christin, N., Safavi-Naini, R. (Eds.), Springer Heidelberg, Germany, pp. 436-454.
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Your Daily Crypto-News Recap: 97 of Top 100 Cryptocurrencies in the Green as Total Crypto Market Cap Adds $20 billion in 2 Days


https://www.ccn.com/candidate-receives-first-ever-bitcoin-donation-to-a-political-campaign-in-taiwan/ https://www.newsbtc.com/2018/09/21/nyu-professor-us-regulators-compete-for-crypto-turf-control-impractical/ https://cointelegraph.com/news/bitcoin-seller-fatigue-means-market-has-bottomed-michael-novogratz-tells-yahoo https://btcmanager.com/altonomy-cryptoasset-management-firm-launches-sell-side-otc-trading-desk/ https://www.ccn.com/california-watchdog-bans-bitcoin-donations-in-political-campaigns/ https://cointelegraph.com/news/crypto-payment-gateway-supports-largest-global-meditation-waives-fees-for-users-who-help https://cointelegraph.com/news/streaming-platform-for-gamers-starts-public-beta-testing-of-its-own-blockchain https://www.ccn.com/blockchain-for-35-million-users-koreas-biggest-insurance-firm-sk-partners-with-icon/ https://www.ccn.com/sec-director-vows-more-substantial-enforcement-against-illegal-icos/ https://cointelegraph.com/news/us-sec-asks-for-further-comment-regarding-vaneck-bitcoin-etf https://bitcoinist.com/bitcoin-etf-delayed-comments/ https://www.ccn.com/binance-coinbase-on-hiring-spree-despite-bear-market-sign-of-rapid-growth/ https://www.coindesk.com/venezuela-to-adopt-controversial-petro-token-in-global-trade/
submitted by QuantalyticsResearch to CryptoCurrency [link] [comments]

Awesome story Daniel M. Harrison - but I wonder if the answer is a much simpler one?

http://www.coindesk.com/predicting-bitcoins-next-price-rise/

Namely as I predicted that the total monopoly on Bitcoin mining has been basically "hostile taken over" by large Chinese miners, and they are now essentially controlling the monopoly on production.
Quark insiders that have gained a lot of education on Crypto see this as "common knowledge", but if you like to read and learn:
http://kolinevans.wordpress.com/2014/09/08/answer-to-professor-david-yermack-how-the-quark-protocol-solved-the-economic-problems-of-bitcoin/
Skip to "welcome to planet Crypto currency" to lean how a monopoly on difficulty works.
http://kolinevans.wordpress.com/2014/08/30/rainbow-charts-not-so-much-but-more-interesting-fundamental-charts/
Want to see what a "sped up" Crypto currency distribution looks like?
Also want to understand more about what a "51% attack means"
http://kolinevans.wordpress.com/2014/07/25/why-the-bitcoin-price-really-needs-bad-news/
Here is where i spoke about the "more adoption less price" vector CITI commented on, it's more about that monopoly than "Merchants" though.
Would love feedback, sorry about any English errors !
: D
submitted by _k_digi to QuarkOmega [link] [comments]

CIFR Interview: Prof David Yermack (NYU Stern) & Prof Ray da Silva (UWA) - Two Strikes Rules BITCOIN Digital Wallet BLOCKCHAIN Hits 1 MILLION USERS ... BITCOIN PUMP??! Dow Jones, Banks and CBDC, Business buying crypto, buy now?  Bitcoin News DEATH Cross Latest Update for Bitcoin XRP News IMF Answer To China Government Cryptocurrency With a Digital Central Bank Currency

The lead article in the January 2017 issue of the Review of Finance is “Corporate Governance and Blockchains” by David Yermack of NYU Stern. We hear blockchains mentioned all the time, but very few people know what they actually are, how they work, and what effect they may have. This paper is an excellent “go to” reference that answers these questions in a clear and non-technical ... Bitcoin investors/enthusiasts must keep in mind that the price of Bitcoin has witnessed a total of 16 price corrections (50% or more) in 7 years, and 8 of these have occurred in the last two years ... Since its inception in 2009, Bitcoin has been characterized by sharp upward and downward price movement associated with high transac-tion volumes. On 19 November 2013, the price of Bitcoin on Bitstamp, the largest European Bitcoin exchange, plunged almost 20% (19.88%) on the highest volume ever recorded (71,560 Bitcoins). Furthermore, technological factor Hashrate as irrelevant for modeling Bitcoin price dynamics. This irrelevance is due to the underlying code that makes the supply of Bitcoins deterministic, and it stands in contrast to previous literature that has included Hashrate as a crucial independent variable. Moreover, the empirical findings indicate that the price of Bitcoin is affected by returns on the S&P 500 ... Yermack (2013) notes that Bitcoin is not suitable to be a currency because of the instability of its price. Grinberg (2014) notes that Bitcoin has legal risk. ... Grinberg (2014) notes that ...

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CIFR Interview: Prof David Yermack (NYU Stern) & Prof Ray da Silva (UWA) - Two Strikes Rules

Impact of Cryptocurrencies on Financial Markets by Prof David Yermack - Duration: 1:24:33. ... Bitcoin Safe Haven Pushes Price Over $8,000 - Duration: 14:15. The Crypto Lark 8,361 views. 14:15 ... Bitcoin 101 - Modelling the Price of Bitcoin - Is a $100,000 bitcoin possible? - Duration: 26:45. ... David Yermack on whether Bitcoin is a real currency - Duration: 6:54. The Conversation 1,796 ... In 2013, bitcoin was worth just $150 when suddenly, the price spiked. Within two months, one bitcoin was worth $1,000. Four researchers from the Tandy School of Computer Science at The University ... Bitcoin had a crash of $600+ that offered us the possibility to learn a few things that will help us for better trading. Keeping your knowledge up to date by running post-trading analysis is ... BITCOIN PRICE DROP?? Craig Wright not Satoshi Proved! Coinbase Omisego Pump and Dump Bitcoin News ... David Yermack on Blockchains and Central Bank Digital Currency (Part 3 of 3) - Duration: 1 ...

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