• Corpus ID: 211296648

Pricing ASICs for Cryptocurrency Mining

@article{Yaish2020PricingAF,
  title={Pricing ASICs for Cryptocurrency Mining},
  author={Aviv Yaish and Aviv Zohar},
  journal={ArXiv},
  year={2020},
  volume={abs/2002.11064}
}
Cryptocurrencies that are based on Proof-of-Work often rely on special purpose hardware (ASICs) to perform mining operations that secure the system. We argue that ASICs have been mispriced by miners and sellers that only consider their expected returns, and that in fact mining hardware should be treated as a bundle of \emph{financial options}, that when exercised, convert electricity to virtual coins. We provide a method of pricing ASICs based on this insight, and compare the prices we derive… 

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