As bitcoin becomes more important as a worldwide financial phenomenon, it also becomes important to understand its sources of value formation. There are three ways to obtain bitcoins: buy them outright, accept them in exchange, or else produce them by 'mining'. Mining employs computational...

Amid its rapidly increasing usage and immense public interest the subject of Bitcoin has raised profound economic and societal issues. In this paper we undertake economic and econometric modelling of Bitcoin prices. As with many asset classes we show that Bitcoin exhibits speculative bubbles....

The proliferation of technology emphasized new forms of payment. During the last years, current literature highlighted the role of virtual currency, the channels of payment through digital coins and the importance of assimilation of such platforms. Bitcoin or BTC is known as a digital coin,...

Bitcoin is a new kind of money, which means a digital currency which can be used for commercial purposes. Over time, the trade has evolved from barter to the use of the precious metals as money, then to the coins with intrinsic value and to the symbol coins and later to the use of the electronic...

This paper provides the necessary technical background to understand basic Bitcoin operations and documents a set of empirical regularities related to Bitcoin usage. We present the micro-structure of the Bitcoin transaction process and highlight the use of cryptography for the purposes of...

Bitcoin is a major virtual currency. Using weekly data over the 2010-2013 period, we analyze a Bitcoin investment from the standpoint of a U.S. investor with a diversified portfolio including both traditional assets (worldwide stocks, bonds, hard currencies) and alternative investments...