Paper by: SILVIA BARTOLUCCI AND ANDREI KIRILENKO
Discussion by: Andreas Park
November 14, 2019
2019 Philadelphia Fed FinTech Conference
Technology
Legal/Regulation
Economic functions
Accounting
Security
Throughput
Functionality
Compatibility
Control rights
Governance
Property/Ownership rights
Recourse/accountability
Cash flows
Contingencies
Governance
(Stability)
Security
reliable
flaky
Mount Gox
Fort Knox
Governance
Security
centralized
Mount Gox
Fort Knox
decentralized
Governance
Censorship Resistance
centralized
censoring impossible
censoring desirable
decentralized
Economic function
- some examples -
native to a blockchain for payment
examples: Bitcoin, Bitcoin Cash, Ether, Lumens, Cardano
Traditional Portfolio Theory
Investment Approach in Paper
Questions
There are by now a lot of papers that study crypto-assets like normal assets. BUT: Do we really understand their economic functionality?
This paper: step in the direction of understanding crypto-assets as investments.
My preference: anchor assumptions in primitives:
What features of crypto-assets give rise to "stability" and how does it affect payoffs?
How do features of "security" affect payoffs?
What type of preferences support the binary-choice equilibrium?
@financeUTM
andreas.park@rotman.utoronto.ca
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