In this paper, we study the wlm digital crypto currency using binomial, Poisson distribution and application in C++. The initial coin offerings price is 0.20 USD. The circulation of the wlm digital currency is expected in September 2021 at www.crypto.com after a crypto currency license is obtained. The market capitalization of the new digital currency or market price multiplied by the units is expected to be 800 trillions USD in 8 years. We are expecting to see a tremendous rise in the price during the first 8 years due to traders and crypto mining interactions. In addition, we expect a rise of 1000% of the total market capitalization during the period 2021-2029. The steps needed to create and launch the new digital currency are blockchain platform, design the nodes, blockchain internal architecture, integrate API such as blockcypher or tierion and design the interface by issuing a license. Our analysis is based on probabilities of success and failure or gains or losses using the Poisson and the binomial probability distribution. We are comparing the probability against a random variable. The Poisson distribution is a discrete probability distribution that can either be used in its own right, or as an approximation to the binomial distribution when the number of trials, n, is very large and the probability of ‘success’, p, is very small. In contrast, the binomial distribution can be derived from a situation, which involves the repetition of an event which has only two possible outcomes such as success or failure, gains or losses.
{"title":"Wlm Crypto Currency Using Binomial, Poisson Distribution and Application in C++ Through Calculations.","authors":"Michel Guirguis","doi":"10.2139/ssrn.3905519","DOIUrl":"https://doi.org/10.2139/ssrn.3905519","url":null,"abstract":"In this paper, we study the wlm digital crypto currency using binomial, Poisson distribution and application in C++. The initial coin offerings price is 0.20 USD. The circulation of the wlm digital currency is expected in September 2021 at www.crypto.com after a crypto currency license is obtained. The market capitalization of the new digital currency or market price multiplied by the units is expected to be 800 trillions USD in 8 years. We are expecting to see a tremendous rise in the price during the first 8 years due to traders and crypto mining interactions. In addition, we expect a rise of 1000% of the total market capitalization during the period 2021-2029. The steps needed to create and launch the new digital currency are blockchain platform, design the nodes, blockchain internal architecture, integrate API such as blockcypher or tierion and design the interface by issuing a license. Our analysis is based on probabilities of success and failure or gains or losses using the Poisson and the binomial probability distribution. We are comparing the probability against a random variable. The Poisson distribution is a discrete probability distribution that can either be used in its own right, or as an approximation to the binomial distribution when the number of trials, n, is very large and the probability of ‘success’, p, is very small. In contrast, the binomial distribution can be derived from a situation, which involves the repetition of an event which has only two possible outcomes such as success or failure, gains or losses.","PeriodicalId":385335,"journal":{"name":"Cryptocurrencies eJournal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-08-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127261016","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this paper, we explore the conversion of market frauds from stocks to virtual assets. We investigate the transition from traditional to digital for six schemes: ransomware, price manipulations, “pumps and dumps”, misrepresentation, “spoofing” and Ponzi schemes to find that the advent of cryptocurrencies may facilitate pseudonymous criminal behavior in the present regulatory environment. Furthermore, apply the Regulatory Dialectic Theory and use the behavioral finance literature to explain the persistence of the relationship between scammers and their victims, as fraudsters innovate in the digital realm, but but investors fail to adapt.
{"title":"Old Frauds with a New Sauce: Digital Coins and Behavioral Paradigms","authors":"Daniel Dupuis, Kimberly Gleason","doi":"10.2139/ssrn.3904002","DOIUrl":"https://doi.org/10.2139/ssrn.3904002","url":null,"abstract":"In this paper, we explore the conversion of market frauds from stocks to virtual assets. We investigate the transition from traditional to digital for six schemes: ransomware, price manipulations, “pumps and dumps”, misrepresentation, “spoofing” and Ponzi schemes to find that the advent of cryptocurrencies may facilitate pseudonymous criminal behavior in the present regulatory environment. Furthermore, apply the Regulatory Dialectic Theory and use the behavioral finance literature to explain the persistence of the relationship between scammers and their victims, as fraudsters innovate in the digital realm, but but investors fail to adapt.","PeriodicalId":385335,"journal":{"name":"Cryptocurrencies eJournal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-08-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125840373","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Wyoming is one of the 50 states of the United States (“U.S.”), located in the Mountain Division in the Western part of the U.S. It is spacious and mountainous with beautiful rivers and valleys. The economy in Wyoming is tied to mining, agriculture, and tourism. However, for the past couple of years, Wyoming has been aiming to become one of the promising crypto lands. Wyoming has enacted multiple crypto laws that seek to create a very friendly environment for blockchain and virtual currency businesses. But to what end?
{"title":"Wyoming's Wild West Blockchain Laws and a Start-up Lobby","authors":"Alexandra Andhov","doi":"10.2139/ssrn.3898451","DOIUrl":"https://doi.org/10.2139/ssrn.3898451","url":null,"abstract":"Wyoming is one of the 50 states of the United States (“U.S.”), located in the Mountain Division in the Western part of the U.S. It is spacious and mountainous with beautiful rivers and valleys. The economy in Wyoming is tied to mining, agriculture, and tourism. However, for the past couple of years, Wyoming has been aiming to become one of the promising crypto lands. Wyoming has enacted multiple crypto laws that seek to create a very friendly environment for blockchain and virtual currency businesses. But to what end?","PeriodicalId":385335,"journal":{"name":"Cryptocurrencies eJournal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-08-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132453989","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Blockchain treasuries are pools of collectively owned cryptocurrency earmarked for the purpose of funding ‘local public goods’ (e.g., protocol fixes, research, bridging infrastrastructure). Ecosystem participants face a trust problem in ensuring that the treasury is robust to opportunism (e.g., theft, hacking, misappropriation). Governance mechanisms (e.g., non-profit foundations, expert committees, voting systems) help to mitigate opportunism and bolster trust in the treasury, but they do so in different ways. In this paper we apply a framework from new comparative economics (the Institutional Possibility Frontier) to compare those governance mechanisms in how they minimise the costs of dictatorship and disorder. We provide case studies of innovative treasury governance mechanisms and interpret them within this framework. We find that the social costs of treasury governance shift throughout the lifecycle of a blockchain ecosystem (suggesting that the optimum governance structure also shifts) and that those costs can be revealed through crisis, leading communities to choose different governance mechanisms.
{"title":"Trust and Governance in Collective Blockchain Treasuries","authors":"Darcy W. E. Allen, C. Berg, A. Lane","doi":"10.2139/ssrn.3891976","DOIUrl":"https://doi.org/10.2139/ssrn.3891976","url":null,"abstract":"Blockchain treasuries are pools of collectively owned cryptocurrency earmarked for the purpose of funding ‘local public goods’ (e.g., protocol fixes, research, bridging infrastrastructure). Ecosystem participants face a trust problem in ensuring that the treasury is robust to opportunism (e.g., theft, hacking, misappropriation). Governance mechanisms (e.g., non-profit foundations, expert committees, voting systems) help to mitigate opportunism and bolster trust in the treasury, but they do so in different ways. In this paper we apply a framework from new comparative economics (the Institutional Possibility Frontier) to compare those governance mechanisms in how they minimise the costs of dictatorship and disorder. We provide case studies of innovative treasury governance mechanisms and interpret them within this framework. We find that the social costs of treasury governance shift throughout the lifecycle of a blockchain ecosystem (suggesting that the optimum governance structure also shifts) and that those costs can be revealed through crisis, leading communities to choose different governance mechanisms.","PeriodicalId":385335,"journal":{"name":"Cryptocurrencies eJournal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-07-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125344360","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We examine the relationship between investor attention, and measures of uncertainty, with the market dynamics of Bitcoin, and other cryptocurrencies. We find that increases in investor attention are associated with higher returns, more volatility, and greater illiquidity in cryptocurrency markets. In contrast, cryptocurrency uncertainty (UCRY) and financial market uncertainty (VIX) are also positively related to volatility and illiquidity but have a negative contemporaneous relationship with returns. The identified relationships are accentuated during the COVID-pandemic, and are robust to different measures of investor attention, volatility, and illiquidity. Our results suggest that monitoring investor attention could assist both investors and policymakers.
{"title":"Investor Attention in Cryptocurrency Markets","authors":"L. Smales","doi":"10.2139/ssrn.3889923","DOIUrl":"https://doi.org/10.2139/ssrn.3889923","url":null,"abstract":"We examine the relationship between investor attention, and measures of uncertainty, with the market dynamics of Bitcoin, and other cryptocurrencies. We find that increases in investor attention are associated with higher returns, more volatility, and greater illiquidity in cryptocurrency markets. In contrast, cryptocurrency uncertainty (UCRY) and financial market uncertainty (VIX) are also positively related to volatility and illiquidity but have a negative contemporaneous relationship with returns. The identified relationships are accentuated during the COVID-pandemic, and are robust to different measures of investor attention, volatility, and illiquidity. Our results suggest that monitoring investor attention could assist both investors and policymakers.","PeriodicalId":385335,"journal":{"name":"Cryptocurrencies eJournal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-07-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122026298","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Part I of this article analyzed the legal and regulatory issues that exist in Australia’s current clearing and settlement infrastructure for shares. Part II of this article looks to the future and analyses the new system (‘CHESS 2.0’) that the Australian Stock Exchange (ASX) proposes to introduce. CHESS 2.0. will use distributed ledger technology (DLT) to process trades. This article will examine the mechanics for the clearing and settlement of shares in CHESS 2.0 and some of the new features that the ASX proposes to introduce. It analyses the legal and regulatory framework in Australia and considers whether CHESS 2.0 will be able to operate under the existing legal regime. It also examines how the new system will affect the rights of investors and provides recommendations for strengthening their rights. Moreover, it recommends that the ASX should implement a system of crypto-securities in the future.
{"title":"The Future of Clearing and Settlement in Australia: Part II - Distributed Ledger Technology","authors":"Christian Chamorro-Courtland","doi":"10.2139/ssrn.3884975","DOIUrl":"https://doi.org/10.2139/ssrn.3884975","url":null,"abstract":"Part I of this article analyzed the legal and regulatory issues that exist in Australia’s current clearing and settlement infrastructure for shares. Part II of this article looks to the future and analyses the new system (‘CHESS 2.0’) that the Australian Stock Exchange (ASX) proposes to introduce. CHESS 2.0. will use distributed ledger technology (DLT) to process trades. This article will examine the mechanics for the clearing and settlement of shares in CHESS 2.0 and some of the new features that the ASX proposes to introduce. It analyses the legal and regulatory framework in Australia and considers whether CHESS 2.0 will be able to operate under the existing legal regime. It also examines how the new system will affect the rights of investors and provides recommendations for strengthening their rights. Moreover, it recommends that the ASX should implement a system of crypto-securities in the future.","PeriodicalId":385335,"journal":{"name":"Cryptocurrencies eJournal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-07-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129468892","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Americans now hold over $1 trillion in cryptocurrencies. Has $1 trillion in wealth been created? From the standpoint of economic theory, the answers is no. The wealth of a society consists of its real assets that produce consumable goods and services. Unless a cryptocurrency provides some type of convenience yield how could it create wealth? On the other hand, everyone who holds the currency thinks of its as wealth because it can be sold and converted into consumption. This short note takes a step in resolving the apparent paradox by presenting a very simple numerical example of the operation of what I call Bubble Wealth.
{"title":"Bubble Wealth","authors":"Bradford Cornell","doi":"10.2139/ssrn.3872160","DOIUrl":"https://doi.org/10.2139/ssrn.3872160","url":null,"abstract":"Americans now hold over $1 trillion in cryptocurrencies. Has $1 trillion in wealth been created? From the standpoint of economic theory, the answers is no. The wealth of a society consists of its real assets that produce consumable goods and services. Unless a cryptocurrency provides some type of convenience yield how could it create wealth? On the other hand, everyone who holds the currency thinks of its as wealth because it can be sold and converted into consumption. This short note takes a step in resolving the apparent paradox by presenting a very simple numerical example of the operation of what I call Bubble Wealth.","PeriodicalId":385335,"journal":{"name":"Cryptocurrencies eJournal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-06-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126253260","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
How crypto flows among Bitcoin users is an important question for understanding the structure and dynamics of the cryptoasset at a global scale. We compiled all the blockchain data of Bitcoin from its genesis to the year 2020, identified users from anonymous addresses of wallets, and constructed monthly snapshots of networks by focusing on regular users as big players. We apply the methods of bow-tie structure and Hodge decomposition in order to locate the users in the upstream, downstream, and core of the entire crypto flow. Additionally, we reveal principal components hidden in the flow by using non-negative matrix factorization, which we interpret as a probabilistic model. We show that the model is equivalent to a probabilistic latent semantic analysis in natural language processing, enabling us to estimate the number of such hidden components. Moreover, we find that the bow-tie structure and the principal components are quite stable among those big players. This study can be a solid basis on which one can further investigate the temporal change of crypto flow, entry and exit of big players, and so forth.
{"title":"Bitcoin's Crypto Flow Network","authors":"Yoshiyuki Fujiwara, Rubaiyat Islam","doi":"10.7566/JPSCP.36.011002","DOIUrl":"https://doi.org/10.7566/JPSCP.36.011002","url":null,"abstract":"How crypto flows among Bitcoin users is an important question for understanding the structure and dynamics of the cryptoasset at a global scale. We compiled all the blockchain data of Bitcoin from its genesis to the year 2020, identified users from anonymous addresses of wallets, and constructed monthly snapshots of networks by focusing on regular users as big players. We apply the methods of bow-tie structure and Hodge decomposition in order to locate the users in the upstream, downstream, and core of the entire crypto flow. Additionally, we reveal principal components hidden in the flow by using non-negative matrix factorization, which we interpret as a probabilistic model. We show that the model is equivalent to a probabilistic latent semantic analysis in natural language processing, enabling us to estimate the number of such hidden components. Moreover, we find that the bow-tie structure and the principal components are quite stable among those big players. This study can be a solid basis on which one can further investigate the temporal change of crypto flow, entry and exit of big players, and so forth.","PeriodicalId":385335,"journal":{"name":"Cryptocurrencies eJournal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-06-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125768132","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The crypto industry comprises thousands of cryptocurrencies offering different versions of blockchain-based decentralization – a concept that was described originally in the Bitcoin Whitepaper in 2008. What is Bitcoin’s value proposition in this confusing landscape? Bitcoin is a monetary asset that achieves immutability through a decentralized governance protocol. Such immutability is, in theory, the primary reason behind blockchain technology in the first place. However, besides Bitcoin, what we see across the industry are blockchain-based tokens offering diluted or spurious decentralization, thereby contradicting and defeating the purpose of immutability altogether. This paper highlights these ‘blockchain-fallacies’ through a comparative analysis against Bitcoin’s unique and irreplicable decentralized governance mechanism.
{"title":"Bitcoin, Not Crypto: A Comparative Analysis of Bitcoin's Fundamentally Unique and Irreplicable Properties","authors":"Vijaykumar Selvam","doi":"10.2139/ssrn.3880186","DOIUrl":"https://doi.org/10.2139/ssrn.3880186","url":null,"abstract":"The crypto industry comprises thousands of cryptocurrencies offering different versions of blockchain-based decentralization – a concept that was described originally in the Bitcoin Whitepaper in 2008. What is Bitcoin’s value proposition in this confusing landscape? Bitcoin is a monetary asset that achieves immutability through a decentralized governance protocol. Such immutability is, in theory, the primary reason behind blockchain technology in the first place. However, besides Bitcoin, what we see across the industry are blockchain-based tokens offering diluted or spurious decentralization, thereby contradicting and defeating the purpose of immutability altogether. This paper highlights these ‘blockchain-fallacies’ through a comparative analysis against Bitcoin’s unique and irreplicable decentralized governance mechanism.","PeriodicalId":385335,"journal":{"name":"Cryptocurrencies eJournal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-06-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114769899","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In the current paper, we develop a methodology to price lookback options for cryptocurrencies. We propose a discretely monitored window average lookback option, whose monitoring frequencies are randomly selected within the time to maturity, and whose monitoring price is the average asset price in a specified window surrounding the instant. We price these options whose underlying asset is the CCI30 index of various Cryptocurrencies, as opposed to a single cryptocurrency, with the intention of reducing volatility, and thus, the option price. We employ the Normal Inverse Gaussian (NIG) and Rough Fractional Stochastic Volatility (RFSV) models to the cryptocurrency market and using the Black-Scholes as the benchmark model. In doing so, we intend to capture the extreme characteristics such as jumps and volatility roughness for cryptocurrency price fluctuations. Since there is no availability of a closed-form solution for lookback option prices under these models, we utilize the Monte Carlo simulation for pricing and augment it using the antithetic method for variance reduction. Finally, we present the simulation results for the lookback options and compare the prices resulting from using the NIG model, RFSV model with those from the Black-Scholes model. We found that the option price is indeed lower for our proposed window average lookback option than for a traditional lookback option. We found the Hurst parameter to be H = 0.09 which confirms that the cryptocurrencies market is indeed rough.
{"title":"Pricing Exotic Derivatives for Cryptocurrency Assets - A Monte Carlo Perspective","authors":"Mesias Alfeus, S. Kannan","doi":"10.2139/ssrn.3862655","DOIUrl":"https://doi.org/10.2139/ssrn.3862655","url":null,"abstract":"In the current paper, we develop a methodology to price lookback options for cryptocurrencies. We propose a discretely monitored window average lookback option, whose monitoring frequencies are randomly selected within the time to maturity, and whose monitoring price is the average asset price in a specified window surrounding the instant. We price these options whose underlying asset is the CCI30 index of various Cryptocurrencies, as opposed to a single cryptocurrency, with the intention of reducing volatility, and thus, the option price. We employ the Normal Inverse Gaussian (NIG) and Rough Fractional Stochastic Volatility (RFSV) models to the cryptocurrency market and using the Black-Scholes as the benchmark model. In doing so, we intend to capture the extreme characteristics such as jumps and volatility roughness for cryptocurrency price fluctuations. Since there is no availability of a closed-form solution for lookback option prices under these models, we utilize the Monte Carlo simulation for pricing and augment it using the antithetic method for variance reduction. Finally, we present the simulation results for the lookback options and compare the prices resulting from using the NIG model, RFSV model with those from the Black-Scholes model. We found that the option price is indeed lower for our proposed window average lookback option than for a traditional lookback option. We found the Hurst parameter to be H = 0.09 which confirms that the cryptocurrencies market is indeed rough.<br>","PeriodicalId":385335,"journal":{"name":"Cryptocurrencies eJournal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-06-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131390078","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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