EconPapers    
Economics at your fingertips  
 

An Equilibrium Model of the Market for Bitcoin Mining

Julien Prat () and Benjamin Walter

No 6865, CESifo Working Paper Series from CESifo Group Munich

Abstract: We propose a model which uses the Bitcoin/US dollar exchange rate to predict the computing power of the Bitcoin network. We show that free entry places an upper-bound on mining revenues and we devise a structural framework to measure its value. Calibrating the model’s parameters allows us to accurately forecast the evolution of the network computing power over time. We establish the accuracy of the model through out-of-sample tests and investigation of the entry rule.

Keywords: Bitcoin; blockchain; miners; industry dynamics (search for similar items in EconPapers)
JEL-codes: D41 L10 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-ene, nep-for, nep-ict, nep-mon and nep-pay
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
https://www.cesifo-group.de/DocDL/cesifo1_wp6865.pdf (application/pdf)

Related works:
Working Paper: An Equilibrium Model of the Market for Bitcoin Mining (2017) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_6865

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Group Munich Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().

 
Page updated 2019-11-14
Handle: RePEc:ces:ceswps:_6865