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.

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Bitcoin – The Currency of the Internet

“A lot of people dismiss e-currency because of all the companies that failed since the 1990’s. It was the centrally controlled nature of those systems that doomed them. I think this is the first time we’re trying a decentralized, non-trust-based system” Satoshi Nakamoto #BitcoinAt10

"A lot of people dismiss e-currency because of all the companies that failed since the 1990's. It was the centrally controlled nature of those systems that doomed them. I think this is the first time we're trying a decentralized, non-trust-based system" Satoshi Nakamoto #BitcoinAt10 submitted by /u/SocialElementGroup
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Bitcoin – The Currency of the Internet

Bisq – the decentralized exchange

  1. Censorship resistance
  2. Privacy
  3. User control of funds

These are the 3 key reasons why decentralized exchanges are fundamental for Bitcoin to succeed. They are not theoretical risks, but very real threats: We have hundreds of examples of users losing funds after ceding control to a custodial exchange. We have dozen of cases of goverments blocking or regulating exchanges out of existence. And we have an ever increasing number of exchanges being forced or choosing to invade user privacy through KYC, AML and other intrusive (and exclusive) requirements… and then leaking or selling that information.

Bisq is currently the best available option to exchange Bitcoin without sacrificing privacy, ceding control of your bitcoins to a third party or allowing censorship of any kind.

  1. Bisq is censorship-resistant: it runs over TOR and cannot be shut down or regulated. It is not a company or website, but rather a P2P network similar to BitTorrent or Bitcoin.
  2. Bisq does not require nor collect your personal information – it is stored locally on your computer and only what is strictly necessary to complete a trade is shared with your counterpart in each trade. There is no central respository of user info.
  3. Bisq never touches your funds – bitcoins are under your control in your own wallet and only locked up in a multi-sig transaction during the execution of each trade. Fiat funds are sent directly from the buyer to the seller without involving a third party.

If you want to help Bisq grow on September 20th there will be a market Kick-start day to push liquidity. Please post a offer to buy/sell on that day to show your interest.

Bisq September Market Kick-Start Day [September 20th]

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Bitcoin – The Currency of the Internet