Bitcoin and Beyond

Annual Review of Financial Economics, Volume 14

26 Pages Posted: 2 Nov 2021

See all articles by Kose John

Kose John

New York University (NYU) - Department of Finance

Maureen O'Hara

Cornell University - Samuel Curtis Johnson Graduate School of Management

Fahad Saleh

Wake Forest University - Schools of Business

Date Written: November 1, 2021

Abstract

We survey extant literature on the economics of blockchain fundamentals with particular focus on Bitcoin, Proof-of-Work and Proof-of-Stake. We formally clarify Bitcoin’s economic significance in solving the double-spending problem without a centralized entity. We then transition to the economics literature, highlighting the key endogenous economic interactions among participants in the Bitcoin ecosystem as well as the economics of Proof-of-Stake and other potential consensus algorithms. Along the way, we discuss various literature that provides important insights regarding fees, forks and price volatility. We conclude by reflecting on the next generation of blockchain innovations.

Keywords: blockchain, bitcoin, fees, proof-of-work, proof-of-stake

JEL Classification: G00, O30

Suggested Citation

John, Kose and O'Hara, Maureen and Saleh, Fahad, Bitcoin and Beyond (November 1, 2021). Annual Review of Financial Economics, Volume 14, Available at SSRN: https://ssrn.com/abstract=3954429

Kose John

New York University (NYU) - Department of Finance ( email )

Stern School of Business
44 West 4th Street
New York, NY 10012-1126
United States
212-998-0337 (Phone)
212-995-4233 (Fax)

Maureen O'Hara

Cornell University - Samuel Curtis Johnson Graduate School of Management ( email )

Ithaca, NY 14853
United States
607-255-3645 (Phone)
607-255-5993 (Fax)

Fahad Saleh (Contact Author)

Wake Forest University - Schools of Business

P.O. Box 7659
Winston-Salem, NC 27109-7285
United States

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