Boltzmann Entropy in Cryptocurrencies: A Statistical Ensemble Based Approach

Luca Grilli and Domenico Santoro

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper we try to build a statistical ensemble to describe a cryptocurrency-based system, emphasizing an "affinity" between the system of agents trading in these currencies and statistical mechanics. We focus our study on the concept of entropy in the sense of Boltzmann and we try to extend such a definition to a model in which the particles are replaced by N agents completely described by their ability to buy and to sell a certain quantity of cryptocurrencies. After providing some numerical examples, we show that entropy can be used as an indicator to forecast the price trend of cryptocurrencies.

Keywords: Cryptocurrency; Entropy; Prices Forecast; Boltzmann; Blockchain (search for similar items in EconPapers)
JEL-codes: C02 C69 E44 E47 G12 G17 G19 (search for similar items in EconPapers)
Date: 2020-04-11
New Economics Papers: this item is included in nep-for, nep-mac, nep-mon, nep-ore and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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