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.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Notes
References
August, T., Dao, D., & Niculescu, M. F. (2019). Economics of ransomware attacks. Available at SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3351416. Accessed 22 November 2019.
Banks, J. S. (2000). Buying supermajorities in finite legislatures. American Political Science Review, 94(3), 677–681.
Bell, S. (2001). The role of the state and the hierarchy of money. Cambridge Journal of Economics, 25(2), 149–163.
Benjamin, V., Valacich, J. S., & Chen, H. (2019). DICE-E: A framework for conducting Darknet identification, collection, evaluation with ethics. MIS Quarterly, 43(1), 1–22.
Brunnermeier, M. K., & Niepelt, D. (2019). On the equivalence of private and public money. National Bureau of Economic Research no. w25877.
Garratt, R., & Tröger, T. (2006). Speculation in standard auctions with resale. Econometrica, 74(3), 753–769.
Groseclose, T., & Snyder, J. M. (1996). Buying supermajorities. American Political Science Review, 90(2), 303–315.
Kiyotaki, N., & Wright, R. (1989). On money as a medium of exchange. Journal of Political Economy, 97(4), 927–954.
Lamport, L., Shostak, R., & Pease, M. (1982). The byzantine generals problem. ACM Transactions on Programming Languages and Systems (TOPLAS), 4(3), 382–401.
Li, X., & Whinston, A. B. (2019a). Public blockchain security and bribery among its writers. Working paper.
Li, X., & Whinston, A. B. (2019b). Externalities of paying ransom to attackers. Working paper.
Minsky, H. P. (1986). Stabilizing an unstable economy. New Haven: Yale University Press.
Mundell, R. A. (1961). A theory of optimum currency areas. The American Economic Review, 51(4), 657–665.
Nakamoto, S. (2008). Bitcoin: A peer-to-peer electronic cash system. Available at https://bitcoin.org/bitcoin.pdf.
Popper, N. (2019). Telegram pushes ahead with plans for “gram” cryptocurrency. New York Times, August 27, https://www.nytimes.com/2019/08/27/technology/telegram-cryptocurrency-gram.html. Accessed 22 November 2019.
Wu, R., Geng, X., & Whinston, A. B. (2012). A generalized model of partial resale. Decision Support Systems, 53(1), 108–117.
Zhao, Y., & Zhu, Q. (2014). Evaluation on crowdsourcing research: Current status and future direction. Information Systems Frontiers, 16(3), 417–434.
Author information
Authors and Affiliations
Corresponding author
Additional information
Publisher’s Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
About this article
Cite this article
Li, X., Whinston, A.B. Analyzing Cryptocurrencies. Inf Syst Front 22, 17–22 (2020). https://doi.org/10.1007/s10796-019-09966-2
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10796-019-09966-2