Price of Bitcoin AMA: I’m Emiliano Pagnotta, Assistant Professor of Finance at Imperial College Business School. I have recently published a research paper titled ‘Bitcoin As Decentralized Money: Prices, Mining Rewards, and Network Security’. AMA! (Live at 10am ET, Wed 28 Nov 2018)

Hi Reddit! I’m Emiliano Pagnotta, Assistant Professor of Finance at Imperial College Business School. I have recently published a research paper titled ‘Bitcoin As Decentralized Money: Prices, Mining Rewards, and Network Security’.

About the paper:

In it, I address the determination and evolution of bitcoin prices and propose a simple monetary model that, unlike traditional ones, captures salient features of a decentralized network. In the framework I propose, network users forecast the transactional and resale value of bitcoin holdings and consider the risk of a network attack.

Miners contribute resources that enhance network security and compete for mining rewards received in units of the same token used by consumers. In equilibrium, the overall production of network security and the bitcoin price are jointly determined. Put simply, price does not follow the system hashrate and the hashrate does not passively follow the price either.

I develop several empirical predictions that show how the characteristics of network technologies and participants, users and miners, affect the number and dynamic stability properties of equilibria.

Regarding reward halvings, I find that the relation between bitcoin prices and the supply growth rate is not monotonic: the same price is consistent with different rates. The model’s outcomes demonstrate how intrinsic price–security feedback effects can amplify or moderate the price volatility effect of demand and supply shocks. I find rational patterns of price momentum with frequent booms and crashes and that small and large bubbles can exist in equilibrium and show how the probability of bursting decreases with the bitcoin price.

Earlier this year I published an article on the ‘Value of Bitcoin and Decentralized Network Assets’. I held an AMA on the topic, which can be seen here: https://www.reddit.com/r/Bitcoin/comments/8c05vr/hi_rbitcoin_im_emiliano_pagnotta_assistant/

About me:

  • My research focuses on the exchange and valuation of financial assets and the organization and evolution of the markets where those assets trade in.
  • Recently, my work analyzes the consequences of speed and fragmentation in financial markets, the identification of private information in stock and derivatives markets, and the valuation of Bitcoin and other blockchain assets. This research is regularly presented in leading academic and professional conferences and published in academic journals such as Econometrica.
  • Before joining Imperial College, I was at the New York University Stern School of Business. I hold a Ph.D. in Economics from Northwestern University.

I’ll be back at 10am ET Wednesday 28 Nov to answer your questions, ask me anything!

Proof:

http://www.imperial.ac.uk/people/e.pagnotta

http://www.emilianopagnotta.com/

To learn more about me and my research, follow me on Twitter @esp_research and LinkedIn.

submitted by /u/esp-research
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Bitcoin – The Currency of the Internet

I finally built something … Our business now accepts Bitcoin!

When asked once if he thought Amazon would ever adopt Bitcoin as a payment method for its business, Adreas Antonopoulos responded that he had no idea and didn’t really care, but then he said, “Why don’t you adopt it? Why don’t you build something?” I heard that a long while ago now and it always sorta stuck with me, but I’m not a developer. I don’t know code (ok, it’s on my to-do list), so I felt I really couldn’t build something. I always thought, besides telling people about Bitcoin (and watching their eyes glaze over as I’d talk about such things like L2 projects), what can I really do? Telling people is actually really good for adoption, but a topic for another day…

My wife and I own and operate a small tea business, mainly online. I had built the website for our business and always wanted to be able to accept Bitcoin as payment but struggled to figure out how without paying more than I wanted for a service. I watched with excitement as many reported their new developments on Bitcoin, but I lacked the skills to code something from scratch for myself, so I put the whole thing on the back burner.

It was actually some crypto Reddit users that were using a fairly simple method of running an online business utilizing a simple method of crypto-integration, and it showed me that I had been over-thinking it. It didn’t need to be fancy or ingenious, just presentable and functional. Maybe down the road I’ll find myself running a Lightning node or something, but for now we kept it really simple. We’re all trying help in our own ways toward development and/or adoption, so this was my own small attempt.

So I’m happy to say that we have joined the growing list of merchants willing and eager to accept Bitcoin as payment! Our company website is www.inistea.com (the link to the crypto payments page is under the homepage banner). It sorta operates like an old mail-order catalog, so the phrase “crude yet effective” is appropriate here. But it gets the job done and beats not doing anything, in my opinion. Obviously you’ll see that we decided to accept other things than Bitcoin -out of business prudence. We’re also offering a 20% discount to further provide incentive for people to try it out.

In addition to furthering the adoption of Bitcoin to our customers, our business is currently set up to raise money for a different sort of adoption… The adoption of a child to our family from the Philippines. I think we sometimes get lost in why we all believe crypto is a worthwhile thing. We get lost in the price and the markets and forget that we’re trying to improve the world in a certain way. Sure there are the get-rich-quick folks around, but for those of us who truly love the tech… Why all the passion if we didn’t actually believe it was going to help people in a myriad of ways? Well, just maybe here’s one more way crypto might help lives, perhaps in a more unexpected way.

submitted by /u/Mithrandir75
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Bitcoin – The Currency of the Internet

My online bank have started asking me the purpose of any payments I am making online. This infuriates me….I can’t find the “none of your f***ing business” option. One more reason I hate the current banking system. Long live bitcoin!

My online bank have started asking me the purpose of any payments I am making online. This infuriates me....I can’t find the “none of your f***ing business” option. One more reason I hate the current banking system. Long live bitcoin! submitted by /u/everyonesastudent
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Bitcoin – The Currency of the Internet

As a leather worker, it is hard to use crypto in my day to day life, as most of my day to day life revolves around what I do for work. So it’s good to see one of the oldest types of business (a leather tannery) adopting one of the newest forms of payment!

As a leather worker, it is hard to use crypto in my day to day life, as most of my day to day life revolves around what I do for work. So it's good to see one of the oldest types of business (a leather tannery) adopting one of the newest forms of payment! submitted by /u/whiely
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Bitcoin – The Currency of the Internet

From start to finish, Bitcoin payment is solid and irreversible; your business has no further worries as to chargebacks or fees imposed at random. There are no membership or month to month expenses, reducing business costs, thereby increasing profit margins.

From start to finish, Bitcoin payment is solid and irreversible; your business has no further worries as to chargebacks or fees imposed at random. There are no membership or month to month expenses, reducing business costs, thereby increasing profit margins. submitted by /u/njscoro1
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Bitcoin – The Currency of the Internet