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Since Bitcoin’s introduction in 2009, interest in cryptocurrencies has soared. One manifestation of this interest has been the explosion of newly created coins. This paper examines the dynamics of coin creation, competition and destruction in the cryptocurrency industry. In order to conduct the analysis, we develop a methodology to identify peaks in prices and trade volume, as well as when coins are abandoned and subsequently “resurrected”. We study trading activity associated with 1 082 coins over a nearly five-year period. We present evidence that the more frequently traded coins experience the biggest price rises. They are also much less likely to be abandoned, that is, to experience a drop in average trading volume to below 1% of a prior peak value. Overall, we find that 44% of publicly-traded coins are abandoned, at least temporarily. 71% of abandoned coins are later resurrected, leaving 18% of coins to fail permanently. We then examine the association between entry and exit and other key variables such as price, volume, and market capitalization in order to analyze and provide intuition underpinning the fundamentals in this market. We conclude by examining the bursting of the Bitcoin bubble in December 2017. Unlike the end of the 2013 bubble, some alternative cryptocurrencies continue to flourish after the fall of Bitcoin.
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Detecting Text Reuse in Cryptocurrency Whitepapers
Thousands of new cryptocurrencies have been introduced in recent years. Most are introduced with a so-called "whitepaper" containing a mix of technical documentation, legal boilerplate and marketing material. Notably, many proposed currencies reuse text from previous established cryptocurrencies. We analyze the whitepapers from 1 260 actively traded cryptocurrencies and 2 039 ICOs. We develop two measures of similarity. Moderately similar papers reuse text in a portion of the paper, often the legal disclaimers. By contrast, some highly similar whitepapers appear to copy most of the text. 4% of coin and 19% of ICO whitepapers are highly similar to those of traded coins. The fraction rises to 64% for coins and 67% for ICOs when we consider moderate text reuse.
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- Award ID(s):
- 1714291
- PAR ID:
- 10302254
- Date Published:
- Journal Name:
- 2021 IEEE International Conference on Blockchain and Cryptocurrency (ICBC)
- Page Range / eLocation ID:
- 1 to 5
- Format(s):
- Medium: X
- Sponsoring Org:
- National Science Foundation
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- Free Publicly Accessible Full Text
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Accepted Manuscript1.0
- Conference Paper:
- https://doi.org/10.1109/ICBC51069.2021.9461147
