A Model of Cryptocurrencies

【Author】 Sockin, Michael; Xiong, Wei

【Source】MANAGEMENT SCIENCE

【影响因子】6.172

【Abstract】We model cryptocurrencies as utility tokens used by a decentralized digital platform to facilitate transactions between users of certain goods or services. The network effect governing user participation, in conjunction with the nonneutrality of the token price, can cause the token market to break down. We show that token retradeability mitigates this risk of breakdown on younger platforms by harnessing user optimism but worsens this fragility when sentiment trading by speculators crowds out users. Elastic token issuance mitigates this fragility, but strategic attacks by miners exacerbate it because users' anticipation of future losses depresses the token's resale value.

【Keywords】cryptocurrency; token price nonneutrality; optimism; platform fragility

【发表时间】

【收录时间】2023-05-27

【文献类型】实证数据

【主题类别】

区块链治理-市场治理-市场分析