National Journal of Multidisciplinary Research and Development, Volume 2, Issue 3, September 2017
7 Pages Posted: 30 Nov 2017 Last revised: 6 Dec 2017
Date Written: September 12, 2017
Digital India is a flagship program of the Government of India with a vision to transform India into a digitally empowered society and knowledge economy. “Faceless, Paperless, Cashless” is one of professed role of Digital India. As part of promoting cashless transactions and converting India into less-cash society, various modes of digital payments have been put out.
Financial market regulators and central banks around the world regularly warn consumers about the risks related to virtual currencies. The Institute for Development & Research in Banking Technology (IDRBT), the research arm of RBI had published a report in which it stated that the time had come to adopt the blockchain technology in India, in the bid to evolve towards a cashless society.
As regards non-fiat crypto currencies, the RBI is not comfortable; the intrinsic value of the VC seems to be a matter of speculation, moreover the legal status is definitely missing, finally, the usage of VCs for illicit and illegal activities in the dark net has been reported to be hitting the roof across the world. The present paper takes into perspective the rapidly evolving Technology of the Digital Virtual Currency landscape from the Indian standpoint and the related Legal Conundrum.
Bitcoin Mining and Its Cost
9 Pages Posted: 5 Dec 2017
Date Written: November 24, 2017
As cryptocurrencies make a bid to become more mainstream, we investigate the resources needed to operationalize these at scales comparable to the traditional monetary system. As a first step, we study Bitcoin system, its mining process, and its resource requirements. Mining is a necessary process for the creation of bitcoins and verification of transactions. The process also makes the system decentralized and maintains security and trust in the system. Mining, which is tied to the solution of a complex crypto-puzzle, requires significant computing power. This resource demanding process has a significant impact on energy consumption. Our research looks at how the complexity of the problem to commit a transaction to the blockchain and the transaction volume impact computing capacity and energy consumption. We use data from January 2009 to October 2017 to analyze the problem. We highlight how the complexity, transaction volume, and price of bitcoins affect the mining capacity of miners. We find that the energy demand from mining activities will exceed 30,582 MW per month at 400 transactions/second. Our findings suggest that Bitcoin’s protocol induces competition among miners and computational power race, which may not be sustainable for future growth of the Bitcoin network.
Metcalfe’s Law as a Model for Bitcoin’s Value
23 Pages Posted: 2 Dec 2017 Last revised: 21 Dec 2017
Date Written: October 9, 2017
This paper demonstrates that bitcoin’s medium- to long-term price follows Metcalfe’s law. Bitcoin is modeled as a token digital currency, a medium of exchange with no intrinsic value that is transacted within a defined electronic network. Per Metcalfe’s law, the value of a network is a function of the number of pairs transactions possible, and is proportional to n-squared. A Gompertz curve is used to model the inflationary effects associated with the creation of new bitcoin. The result is a parsimonious model of supply (number of bitcoins) and demand (number of bitcoin wallets), with the conclusion bitcoin’s price fits Metcalfe’s law exceptionally well. Metcalfe’s law is used to investigate Gandal’s et.al  assertion of price manipulation in the Bitcoin ecosystem during 2013-2014.
Keywords: Bitcoin, Metcalfe, Finance, Investment, Economics, Network Economics, Currency
Cryptocurrencies as an Asset Class: An Empirical Assessment
59 Pages Posted: 30 Nov 2017 Last revised: 6 Dec 2017
Date Written: December 5, 2017
It has long been debated whether cryptocurrencies are just a passing fad, a disruptive innovation, or simply share features with standard securities. In this paper, I use a novel data set of prices, traded volumes, and market capitalization for a large set of cryptocurrencies to empirically investigate both their relationship with standard asset classes and the main driving factors behind market activity. The main empirical results suggest that there is a significant relationship between returns on cryptocurrencies and commodities such as gold and energy. Also, while volatility correlates with traded volume, the latter is primarily driven by past returns and by a short-lived effect of aggregate market uncertainty. This is consistent with existing theoretical models in which trading activity is primarily driven by investors’ sentiment. Finally, impulse-response functions from a panel Vector Autoregressive (VAR) model show that macroeconomic factors do not significantly drive trading activity in cryptocurrency markets.
To its proponents, the cryptocurrency Bitcoin offers the potential to disrupt payment systems and traditional currencies. It has also been subject to security breaches and wild price fluctuations. This paper identifies and analyzes the impact of suspicious trading activity on the Mt. Gox Bitcoin currency exchange, in which approximately 600,000 bitcoins (BTC) valued at $188 million were fraudulently acquired. During both periods, the USD-BTC exchange rate rose by an average of four percent on days when suspicious trades took place, compared to a slight decline on days without suspicious activity. Based on rigorous analysis with extensive robustness checks, the paper demonstrates that the suspicious trading activity likely caused the unprecedented spike in the USD-BTC exchange rate in late 2013, when the rate jumped from around $150 to more than $1,000 in two months.KeywordsBitcoincryptocurrenciesfraudexchange rate manipulationJEL classification
Bank of America Corp. may not be willing to help customers invest in Bitcoin, but that doesn’t mean it isn’t plowing into the technology underlying the cryptocurrency.The Charlotte, North Carolina-based lender has applied for or received at least 43 patents for blockchain, the ledger technology used for verifying and recording transactions that’s at the heart of virtual currencies. It is the largest number among major banks and technology companies, according to a study by EnvisionIP, a New York-based law firm that specializes in analyses of intellectual property.“Based on what’s publicly out there, the technology sector hasn’t embraced blockchain as much as the financial-services industry,” Maulin Shah, managing attorney for EnvisionIP, said in an interview.International Business Machines Corp., which has targeted blockchain and artificial intelligence for future growth, tied with Mastercard Inc. for second on the list, with 27 each.
The Blockchain for Creative Industries cluster comprises staff from the Faculty of Arts and Creative Industries, as well as from Science and Technology. We explore the disruptive, and enabling potential of blockchain technology for music, photography, art, fashion, film, journalism and gaming. As well as high-quality research outputs, the cluster is committed to teaching at both undergraduate and postgraduate levels.
Areas of interest include new business and economic models; creative entrepreneurship and artistic identity; copyright; visual analytics; and digital forensics. As well as exploring the considerable potential for innovation, we also look at barriers to adoption and possible disadvantages of this new technology – one some have suggested could be as significant as the World Wide Web.
Members of the cluster have been interviewed on behalf of the French Intellectual Property Office, and have taken part in round-table events alongside representatives of the Department of Work & Pensions and the Government Office for Science.
Cluster members have spoken at events organised by Blockchain Storm and the Bitcoin and Blockchain Leadership Forum, and at festivals including the Great Escape and Wilderness. We have also spoken internationally, at events including Distributed: Music in Nashville, USA, and as part of Global Entrepreneurship Week in Bergen, Norway. Cluster members have been interviewed on the BBC and written articles for publications including the Guardian, the Conversation and Distributed magazine.
Our Music on the Blockchain report, published in 2016, received extensive media coverage from publications including Music Week, Music 4.5, International Business Times, Tech City News, Cryptocoin News, City A.M., Fortune magazine, Huffington Post and Record of the Day. The report was launched at Sonos Studios in London, with leading figures in academia and industry.
The cluster is part of the Open Music Initiative, alongside Berklee, MIT, Harvard and UCL.
- Blockchain for Creative Industries Cluster (2016), Music on the Blockchain: Blockchain For Creative Industries Research Cluster, Middlesex University
- O’Dair, M (2016). The networked record industry: How blockchain technology could transform the consumption and monetisation of recorded music. New Economic Models in the Digital Economy, March 2016.
White Rabbit begins with the assumption that while they love their pirate sites, a many as 60% of pirates would happily reward creators if it was made easy enough. The startup deals with this by inviting pirates to carry on using the kinds of unauthorized sites and services they’re using already, but with a twist.By installing the White Rabbit browser plug-in, the company will be able to see what content the user is accessing. It will then attempt to match that download to deals it’s made with the companies behind those movies or TV shows. They’ll then get paid a set amount.“White Rabbit is a content ecosystem accessed through a plugin that recognizes the film and series you stream. The streaming sites are P2P or open server, meaning users can choose where they want to stream,” White Rabbit CEO Alan R. Milligan informs TF.“We already have a library of films that have won and been nominated for Oscars, Cannes, Berlin and Venice film festival best film prizes – but will continue adding more films and series as we near launch.”