Abstract
[Extract]
Cryptocurrency and blockchain: tulip mania or digital promise for the millennial generation? 1. What is a cryptocurrency? Cryptocurrencies and tokens are digital or “virtual” assets – literally blips on a computer screen or in a computer file – that serve as a medium of exchange just as familiar fiat currencies do. The “price” of a cryptocurrency or token in US$ is an exchange rate at which cryptocurrencies can be converted into US$, in the same way that the JPY/US$ exchange rate is the price at which JPY can be changed into US$. Bitcoin is the best-known cryptocurrency, but there are now more than 200 others, the most popular being Ethereum, Ripple, Dash, Litecoin and Monero. Bitcoins and “altcoins” – alternative coins to Bitcoins – also have a store-of-value. In September 2018, that aggregate value was around $US220bn, of which 40 per cent or so is Bitcoin as measured by aggregate market cap (though market caps are at best a rough guide to store-of-value in crypto-land). Tokens are issued in Initial Coin Offerings (ICOs) by companies looking to fund development of services, loosely a crowd-funding version of the traditional corporate IPOs; the tokens are rights to future payments or services and trade in Bitcoins or altcoins on a secondary market. There were about US$4bn of ICOs in 2017 and US$17bn for the first half of 2018.
Cryptocurrency and blockchain: tulip mania or digital promise for the millennial generation? 1. What is a cryptocurrency? Cryptocurrencies and tokens are digital or “virtual” assets – literally blips on a computer screen or in a computer file – that serve as a medium of exchange just as familiar fiat currencies do. The “price” of a cryptocurrency or token in US$ is an exchange rate at which cryptocurrencies can be converted into US$, in the same way that the JPY/US$ exchange rate is the price at which JPY can be changed into US$. Bitcoin is the best-known cryptocurrency, but there are now more than 200 others, the most popular being Ethereum, Ripple, Dash, Litecoin and Monero. Bitcoins and “altcoins” – alternative coins to Bitcoins – also have a store-of-value. In September 2018, that aggregate value was around $US220bn, of which 40 per cent or so is Bitcoin as measured by aggregate market cap (though market caps are at best a rough guide to store-of-value in crypto-land). Tokens are issued in Initial Coin Offerings (ICOs) by companies looking to fund development of services, loosely a crowd-funding version of the traditional corporate IPOs; the tokens are rights to future payments or services and trade in Bitcoins or altcoins on a secondary market. There were about US$4bn of ICOs in 2017 and US$17bn for the first half of 2018.
| Original language | English |
|---|---|
| Pages (from-to) | 2-7 |
| Number of pages | 6 |
| Journal | Studies in Economics and Finance |
| Volume | 36 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - 21 Jun 2019 |
| Externally published | Yes |