Goutte / Guesmi / Saadi Cryptofinance and Mechanisms of Exchange

The Making of Virtual Currency
1. Auflage 2020
ISBN: 978-3-030-30738-7
Verlag: Springer International Publishing
Format: PDF
Kopierschutz: 1 - PDF Watermark

E-Book, Englisch, 202 Seiten

Reihe: Contributions to Management Science

This book describes how the rapid advancement in encryption and network computing gave birth to new tools and products that have influenced the local and global economy alike. One recent and notable example is the emergence of virtual currencies (such as Bitcoin) also known as cryptocurrencies. Virtual currencies introduced a fundamental transformation that affected the way goods, services and assets are exchanged. As a result of its distributed ledgers based on blockchain, cryptocurrencies not only offer some unique advantages to the economy, investors, and consumers, but also pose considerable risks to users and challenges for regulators when fitting the new technology into the old legal framework. The core of this proposed book is to present and discuss the evidence on financial asset capabilities of virtual currencies. The contributors of this volume analyze several interesting and timely issues such as the particularities of virtual currencies and their statistical characteristics; the diversification benefits of virtual currencies; the behavior and dependence structure between virtual currencies and the financial markets; the economic implications of virtual currencies, their effects, their price risk, and contagion spillovers in a unified and comprehensive framework;  the future of virtual currencies and their distributed ledgers technology.

DR. Khaled Guesmi is a full Professor of Finance at Paris School of Business and adjunct professor at Telfer School of Management, University of Canada. He undertakes research and lectures on empirical finance, applied time-series econometrics, and commodity markets. Dr. Guesmi obtains his HDR (Habilitation for Supervising Doctoral Research) in in July 2015. He holds his Ph.D. in Economics from the University Paris Nanterre in 2011, and his M.Sc. in Finance from Paris I University of Sorbonne in 2005. Previously, he served as Professor of Finance and Head of Environment, Climate Change and Energy Transition Chair at IPAG Business School, as associate research positions at 'EconomiX' laboratory at the University of Paris Ouest La Défense and 'ERF' Economic Research Forum, Egypt. In 2003 Dr. Guesmi joined the UNESCO as a Research Manager, and in 2008, he joined 'Caisse de Dépôts et Consignations' as Financial Analyst.He has published articles in leading refereed journals, including the Energy Journal; International Review of Financial Analysis; Journal of International Financial Markets, Institutions & Money, Annals of Operations Research, Energy Economics and Energy Policy. Furthermore, Dr. Guesmi currently serves as Associate Editor at Finance Research Letters, as international advisory board at The International Spectator. In addition, Khaled Guesmi is the founder of the International Symposium on Energy and Finance Issues and the Project Manager of European Commission's Horizon 2020 Program for Research and Innovation. Dr. Khaled Guesmi hold the 4th best world researcher in Energy Finance: Frontiers and Future Development in Beijing in 2018.
Stéphane Goutte has two PhDs, one in Mathematics and one in Economics. He got his Habilitation for Supervising Scientific Research (HDR) in 2017 at University Paris Dauphine. He is Associate Professor at University Paris 8 and senior lecturer at University of Luxembourg. He is a Senior Editor of Finance Research Letters (FRL), an Associate Editor of International Review of Financial Analysis (IRFA) and Research in International Business and Finance (RIBAF), a Subject Editor of Journal of International Financial Markets, Institutions and Money (JIFMIM) and an Editorial member of European Management Review (EMR). His interests lie in the area of mathematical finance and econometric applied in energy, commodities or environmental issues. He published more than fourty research papers in international review including the Energy Economics; Energy Policy; Applied Mathematical Finance; Stochastic Processes and their Applications; Journal of Computational Finance; International Review of Financial Analysis; Journal of International Financial Markets, Institutions & Money; Annals of Operations Research; Applied Economics; Finance Research Letters. He was a guest-editor of special issue of international  peer-reviewed journals and editor of many handbooks. He is the recipient of best paper awards, and various prestigious awards. He was a Visiting Professor at world leading research-intensive institutions. Dr. Samir Saadi is an Associate Professor and Telfer Fellow in Behavioral Finance at Telfer School of Business. He received a Ph.D. from Smith School of Business of Queen's University. Before joining the University of Ottawa, he was a Visiting Scholar at world leading research-intensive institutions such as Stern School of Business of New York University and INSEAD (France). He held several external grants from, among others, the Social Sciences and Humanities Research Council of Canada (SSHRC). His current research funded by SSHRC focuses on how social media influences investors' behaviour. Along with several book chapters, Dr. Saadi has published over 50 academic papers in refereed journals such us Financial Management, Journal of Corporate Finance, Journal of Banking and Finance, Journal of Financial Research, Contemporary Accounting Research, Journal of Business Ethics, and Journal of Business Finance and Accounting. He is an Editor of Finance Research Letters and has been Guest Editor of several special issues of peer-reviewed journals, and keynote speaker in several international conferences. He is the recipient of best paper awards, and various prestigious awards from, among others, the SSHRC, the Europlace Institute of Finance, and the American Finance Association.

Autoren/Hrsg.

Goutte, Stéphane

Guesmi, Khaled

Saadi, Samir

Inhaltsverzeichnis

1;Preface;6
2;Contents;8
3;About the Editors;9
4;Cryptocurrencies as an Asset Class;11
4.1;1 Introduction;11
4.2;2 The Technology Behind Cryptocurrency;13
4.3;3 The Rise of Cryptocurrency;15
4.4;4 Potential Assets: Cryptographic Coins and Tokens;16
4.5;5 Cryptocurrencies as Investments;17
4.5.1;5.1 Investability;17
4.5.2;5.2 Impact on Portfolio Performance;19
4.6;6 Dataset and Methodology;20
4.6.1;6.1 Data;20
4.6.2;6.2 Methodology;22
4.6.2.1;6.2.1 Correlation;22
4.6.2.2;6.2.2 Liquidity;23
4.6.2.3;6.2.3 Stability;23
4.6.2.4;6.2.4 Portfolio Optimizations;24
4.7;7 Results;25
4.7.1;7.1 Correlation;25
4.7.2;7.2 Liquidity;28
4.7.3;7.3 Stability;30
4.7.4;7.4 Portfolio Optimization;31
4.8;8 Conclusion;35
4.9;References;36
5;Are Virtual Currencies Virtuous? Ethical and Environmental Issues;39
5.1;1 Introduction;39
5.2;2 Cryptocurrencies and Energy Consumption: Virtual Currency but Real Environmental Impact;42
5.2.1;2.1 Why This Is a Serious Issue?;42
5.2.1.1;2.1.1 Bitcoin and Other Main Crypto Currencies: An Overview;42
5.2.1.2;2.1.2 Systems Dynamics: Applied to the Bitcoin Case;44
5.2.2;2.2 What Are the Solutions?;46
5.2.2.1;2.2.1 Green Energy;46
5.2.2.2;2.2.2 Mining Equipment Energy Efficiency;46
5.2.2.3;2.2.3 System Parameters;46
5.2.2.4;2.2.4 Mining Competition;47
5.2.3;2.3 A Striking Example of Real Issues Related to Virtual Systems;48
5.3;3 Cryptocurrencies and the Dark Net: The Dark Side of Cryptocurrencies;48
5.3.1;3.1 Financing Illegal Activities;49
5.3.1.1;3.1.1 Financing of Illicit Products;49
5.3.1.2;3.1.2 Terrorist Financing;50
5.3.2;3.2 Cyber Attacks;51
5.3.3;3.3 Money Laundering and Tax Evasion;52
5.4;4 Ethical Aspects and Uses of Cryptocurrencies;53
5.4.1;4.1 Business Ethics Beyond Government Control;53
5.4.2;4.2 Reduction in Inflation and Central Bank Adjustments;54
5.4.3;4.3 Poverty Reduction;54
5.4.4;4.4 Protection of Privacy and Personal Data;55
5.5;5 Conclusion: Regulatory Issues and Challenges;56
5.6;References;58
6;Cryptocurrency Mining;61
6.1;1 Introduction;61
6.2;2 How Does Mining Work?;62
6.2.1;2.1 Methods of Mining;63
6.2.2;2.2 Hardware for Mining;66
6.2.3;2.3 Software for Mining;68
6.3;3 Evolution of Mining;69
6.4;4 Factors Influencing Mining;70
6.4.1;4.1 Energy Consumption and the Wastage of Resources;71
6.4.2;4.2 Volatility;74
6.4.3;4.3 Mining Puzzles/Solving Blocks;75
6.5;References;76
7;Regulating Bitcoin: A Tax Case Study;78
7.1;1 Introduction;78
7.2;2 The Coffee Bonding Theory;79
7.3;3 A Tax Case Study;80
7.3.1;3.1 Involuntary Noncompliance;81
7.3.2;3.2 Voluntary Noncompliance;82
7.4;4 Conclusion;83
7.5;References;83
8;Are Cryptocurrencies Truly Trustless?;85
8.1;1 Introduction;85
8.2;2 The Promise de Trustlessness;87
8.3;3 Hard Forks;88
8.4;4 Cryptocurrency Exchanges;89
8.4.1;4.1 Mt. Gox;89
8.4.2;4.2 Quadriga CX;90
8.5;5 Initial Coin Offerings;92
8.6;6 Recourse of Traditional Structures;93
8.6.1;6.1 SEC and CFTC as Regulators;93
8.6.2;6.2 Quadriga CX in Court;94
8.7;7 Conclusion;95
8.8;References;96
9;Blockchain and Alternative Sources of Financing;98
9.1;1 Introduction;98
9.2;2 The Ethereum Blockchain and the Ether Crypto-currency;99
9.2.1;2.1 CryptoKitties;99
9.2.2;2.2 Brave Browser;100
9.2.3;2.3 uPort;100
9.3;3 A New Age of Financing, Birth of the ICOs;101
9.3.1;3.1 What is an ICO?;101
9.3.2;3.2 Cryptoexchanges;104
9.3.3;3.3 Similarities Between ICO and Traditional Stock Market;105
9.3.4;3.4 The Pump and Dump Online Community;106
9.3.4.1;3.4.1 Consequences of Pumps and Dumps;107
9.4;4 A New Age of Financing, Birth of the STOs;108
9.4.1;4.1 Coin Classification Framework;108
9.4.2;4.2 The Dawn of the STOs;110
9.4.3;4.3 Avoiding the Mistakes of the Past;110
9.4.4;4.4 Steps for Launching an STO;112
9.4.5;4.5 Advantages and Disadvantages of STOs vs. ICOs;113
9.5;5 IEO, Innovating in an Emerging Industry;115
9.5.1;5.1 The IEO Process;115
9.6;6 Conclusion;116
9.7;References;117
10;Tokenomics;119
10.1;1 Introduction;119
10.2;2 Initial Coin Offerings;120
10.3;3 History of ICOs;120
10.4;4 Literature Review of Parameter of Tokenomics;121
10.5;5 Research of Parameter of Tokenomics;125
10.6;6 Conclusion;127
10.7;References;128
11;Crypto Tokens and Token Offerings: An Introduction;130
11.1;1 Introduction;130
11.2;2 Tokens and Token Offerings;131
11.2.1;2.1 What Are Crypto Tokens?;131
11.2.2;2.2 A Comparison of Token Offerings and IPOs;132
11.3;3 The Emergence of Tokenization and Tokenomics;133
11.3.1;3.1 Tokenomics;133
11.3.2;3.2 The Economic Value of Tokens for Entrepreneurs;134
11.3.2.1;3.2.1 Benefits of ICOs to Entrepreneurs;134
11.3.2.2;3.2.2 Drawbacks;136
11.3.2.3;3.2.3 Implications for Entrepreneurs;136
11.3.3;3.3 The Economic Value of Tokens for Investors;137
11.3.4;3.4 Corporate Governance with Tokens;137
11.3.4.1;3.4.1 Token Holders as a New Type of Corporate Stakeholders;138
11.3.4.2;3.4.2 The Emergence of Distributed Governance;138
11.4;4 Valuation of Crypto Tokens;139
11.4.1;4.1 Token Velocity Methodology;139
11.4.2;4.2 Crypto J-Curve Methodology;140
11.4.3;4.3 Network Value-to-Transaction Ratio (NVT);141
11.4.4;4.4 Security Token Valuation;142
11.4.5;4.5 Traditional Valuation Methods in Crypto Valuation;142
11.5;5 ICO Underpricing and Token Returns;143
11.5.1;5.1 Underpricing and First-Day Returns;143
11.5.2;5.2 Long-Term Returns and Performance;144
11.5.3;5.3 Behavioral Biases in ICOs;145
11.6;6 Conclusion;146
11.7;References;146
12;Initial Coin Offerings: What Do We Know and What Are the Success Factors?;150
12.1;1 Introduction;150
12.2;2 The Market for ICOs and Cryptocurrencies;151
12.2.1;2.1 ICO Market Overview;151
12.2.2;2.2 Four Stages of ICOs;152
12.3;3 Planning Stage of ICOs;152
12.3.1;3.1 White Paper;152
12.3.1.1;3.1.1 White Paper Quality and Informativeness;153
12.3.1.2;3.1.2 Legal Aspects of the White Paper;153
12.3.1.3;3.1.3 Technical Aspects of the White Paper;154
12.3.1.4;3.1.4 Disclosure on the Use of Proceeds and Token Allocation;154
12.3.1.5;3.1.5 Management Team and Advisers;154
12.3.2;3.2 Token Design and Tokenomics;155
12.3.2.1;3.2.1 Token Type;155
12.3.2.2;3.2.2 Fraction of Tokens for Sale;156
12.3.2.3;3.2.3 Soft Cap and Hard Cap;156
12.3.2.4;3.2.4 Token Supply;157
12.3.2.5;3.2.5 Lock-up Mechanism;158
12.3.2.6;3.2.6 Currency Accepted;158
12.3.3;3.3 Legal Aspects;158
12.3.3.1;3.3.1 Sales Restrictions;158
12.3.3.2;3.3.2 Know Your Customer (KYC) Policies;159
12.3.4;3.4 Technology and Source Code;160
12.3.5;3.5 Marketing and Social Media;161
12.3.5.1;3.5.1 Social Media;161
12.3.5.2;3.5.2 ICO Ratings and Online Forums;162
12.4;4 ICO Sale;163
12.4.1;4.1 ICO Presale;163
12.4.2;4.2 ICO Sale;164
12.4.3;4.3 Post-ICO;165
12.4.3.1;4.3.1 Exchange Listing;166
12.5;5 Conclusion;166
12.6;References;167
13;Initial Coin Offerings (ICOs): Risks, Regulation, and Accountability;170
13.1;1 Introduction;170
13.2;2 Academic Interest in ICOs;172
13.3;3 The Wild West of ICOs;174
13.4;4 Regulatory Responses to ICOs;176
13.5;5 Conclusion;179
13.6;References;181
14;Cryptocurrencies and Risk Mitigation;183
14.1;1 Introduction;183
14.2;2 Cryptocurrency Market Efficiency;184
14.3;3 Risk Mitigation Using Cryptocurrencies;185
14.4;4 Hedging Cryptocurrency Investments;187
14.5;5 Economic Policy and Market Uncertainties;190
14.6;6 Cryptocurrencies and Gold;193
14.7;References;194
15;Index;197