Ransomware activity and blockchain congestion

Konstantin Sokolov

Journal of Financial Economics, 2021, vol. 141, issue 2, 771-782

Abstract: I examine blockchain congestion episodes caused by more than 4,400 triggers for ransomware attacks over a two-year period. When demand for settlement exceeds blockchain capacity, blockchain users engage in fee competition to prioritize their transaction settlement. A typical surge in ransomware activity causes transaction fees to increase by 2.1% and up to 28% in extreme cases. Consistent with theory literature, some users forgo blockchain settlement when transaction fees increase. An event study around an extreme spike in ransomware activity supports the findings of the main analysis.

Keywords: Blockchain; Congestion; Ransomware; Transaction fees (search for similar items in EconPapers)
JEL-codes: D47 E42 G10 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (14)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:141:y:2021:i:2:p:771-782

DOI: 10.1016/j.jfineco.2021.04.015

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