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...

Bitcoins are digital gold. They are a purely electronic commodity traded for speculative purposes as well as in exchange for goods and services. Just like physical gold, the relative price of bitcoins denominated in different currencies implies a nominal exchange rate. This is a departure from...

This paper traces the evolution of EU payments law for retail payments, identifying four phases of its development. In spite of the EU's founding principle of free movement of payments, the first two phases of EU payments law were characterized by negative integration and soft law measures with...

Many economists argue that financial market development plays a role in fostering economic development. However, the question of how to extend financial access to the unbanked in underdeveloped countries has long remained a puzzle in the development finance literature. Much of the debate thus...

Bitcoin is a distributed system. The greatest dilemma it poses to the current legal and regulatory systems is that it is hardly possible to regulate a distributed network in a centralized fashion as decentralized permissionless blockchain-based cryptocurrencies are antithetical to the existing...

In this paper we provide a mathematical derivation that links traditional time-value-of-money concepts to Metcalfe value, and use Bitcoin, Facebook as numerical examples of the proof. There is compelling evidence that suggests that the growth and price of bitcoin and other cryptocurrencies are...

We address the determination of bitcoin prices and decentralized security. Users forecast the transactional and resale value of holdings, pricing the risk of malicious systemic attacks. Miners contribute resources to protect against attackers, competing for block rewards. Bitcoin's design leads...

The growing literature on Bitcoin can be divided in two groups. One performs an economic analysis of Bitcoin focusing on its monetary characteristics. The other one looks takes a financial look at the price of Bitcoin. Interestingly, both of these groups have not given much more than passing...

We employ a monetary model with endogenous search and random consumption preferences to consider the extent to which governments can ban bitcoin. We define a ban as a policy whereby government agents refuse to accept bitcoin and mete out punishments to private agents caught using it. After...

Little over a decade has passed since Blockchain gave birth to its prodigy Bitcoin, but Bitcoin despite all the hype (which was referred to as “big bang” by many) failed to become a simple (stable) global crypto-currency for everyday life to enable users worldwide to purchase...