Quantifying the sustainability of Bitcoin and Blockchain

Abstract

PurposeThe authors develop new quantitative methods to estimate the level of speculation and long-term sustainability of Bitcoin and Blockchain.Design/methodology/approachThe authors explore the practical application of speculative bubble models to cryptocurrencies. They then show how the approach can be extended to provide estimated brand values using data from Google Trends.FindingsThe authors confirm previous findings of speculative bubbles in cryptocurrency markets. Relatedly, Google searches for cryptocurrencies seem to be primarily driven by recent price rises. Overall results are sufficient to question the long-term sustainability of Bitcoin with the suggestion that Ethereum, Bitcoin Cash and Ripple may all enjoy technical advantages relative to Bitcoin. Our results also demonstrate that Blockchain has a distinct value and identity beyond cryptocurrencies – providing foundational support for the second generation of academic work on Blockchain. However, a relatively low estimated long-term growth rate suggests that the benefits of Blockchain may take a long time to be fully realised.Originality/valueThe authors contribute to an emerging academic literature on Blockchain and to a more established literature exploring the use of Google data within business analytics. Their original contribution is to quantify the business value of Blockchain and related technologies using Google Trends

Herding and feedback trading in cryptocurrency markets

“…Some of the more recent research in the field examines whether bitcoin price bubbles are detectable (Cretarola and Figà-Talamanca 2019) and information transmission among different bitcoin exchanges (Giudici and Polinesi 2019). Fry and Serbera (2020) estimate the degree of speculation in cryptocurrency markets. Drawing on work by Kristoufek (2013), they show how Google searches for cryptocurrencies can be driven by recent price movements.…”

The Sustainability of Investing in Cryptocurrencies: A Bibliometric Analysis of Research Trends

“…With the lack of a scientifically defined strategy with quantifiable criteria for evaluating and comparing the sustainability of differ-ent cryptocurrencies, there is a substantial research gap. This provides an opportunity to promote academic research on the relationship between sustainability and the characteristics of cryptocurrencies and blockchain (Fry and Serbera 2020). Assessing the long-term viability of numerous cryptocurrencies can serve as a starting point for talks on how to improve the long-term viability of existing or emerging digital currencies, particularly those based on blockchain technology (Giudici et al 2020).…”

America's decoupling from China: A perspective from stock markets

“…Such applications include Fantazzini (2014), who found that models including Google search data statistically outperformed competing models in nowcasting and forecasting the number of food stamp recipients. Fry and Serbera (2020) discussed the bubble-related effects associated with Google Trends data.…”