Cryptocurrency Value Formation: An Empirical Analysis Leading to a Cost of Production Model for Valuing Bitcoin

@inproceedings{Hayes2015CryptocurrencyVF,
  title={Cryptocurrency Value Formation: An Empirical Analysis Leading to a Cost of Production Model for Valuing Bitcoin},
  author={Adam Hayes},
  booktitle={MCIS},
  year={2015}
}
This paper aims to identify the likely source(s) of value that cryptocurrencies exhibit in the marketplace using cross sectional empirical data examining 66 of the most used such 'coins'. A regression model was estimated that points to three main drivers of cryptocurrency value: the difficulty in 'mining 'for coins; the rate of unit production; and the cryptographic algorithm employed. These amount to relative differences in the cost of production of one coin over another at the margin, holding… CONTINUE READING
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