Cryptocurrency Concepts, Technology, and Applications

✍ Scribed by Jay Liebowitz (editor)

• Publisher: Auerbach Publications
• Year: 2023
• Tongue: English
• Leaves: 284
• Edition: 1
• Category: Library

✦ Synopsis

Whether the source is more industry-based or academic research, there certainly appears to be a growing interest in the field of cryptocurrency. The New York Times had a cover story on March 24, 2022, titled "Time to Enter the Crypto Zone?," and they talked about institutional investors pouring billions into digital tokens, salaries being taken in Bitcoins, and even Bitcoin ATMs in grocery stores. Certainly, there have been ups and downs in crypto, but it has a kind of alluring presence that tempts one to include crypto as part of one’s portfolio. Those who are "prime crypto-curious" investors are usually familiar with the tech/pop culture and feel they want to diversify a bit in this fast-moving market. Even universities are beginning to offer more courses and create "Centers on Cryptocurrency." Some universities are even requiring their students who take a crypto course to pay the course tuition via cryptocurrency.

In response to the growing interest and fascination about the crypto industry and cryptocurrency in general, Cryptocurrency Concepts, Technology, and Applications brings together many leading worldwide contributors to discuss a broad range of issues associated with cryptocurrency. The book covers a wide array of crypto-related topics, including:

• Blockchain
• NFTs
• Data analytics and AI
• Crypto crime
• Crypto industry and regulation
• Crypto and public choice
• Consumer confidence
• Bitcoin and other cryptocurrencies.

Presenting various viewpoints on where the crypto industry is heading, this timely book points out both the advantages and limitations of this emerging field. It is an easy-to-read, yet comprehensive, overview of cryptocurrency in the U.S. and international markets.

✦ Table of Contents

Cover
Half Title
Title
Copyright
Dedication
Contents
List of Figures and Tables
Preface
List of Contributors
About the Editor
Chapter 1: Cryptocurrency Industry: A Review of Current and Future Trends
Different Cryptocurrencies: Timeline of Development
Cryptocurrencies: Market Development
Cryptocurrencies, Financial Markets, and Monetary Policies
The Development of the Cryptocurrency Goods and Services Market and Factors Market
The Development of the Cryptocurrency: Summary of Outlook
References
Chapter 2: Investor Attention in Cryptocurrency Markets
Introduction
Measures of Investor Attention
Google Search Volume
Other Direct Measures
Investor Attention in Stock Markets
Investor Attention in Cryptocurrency Markets
Returns
Volatility and Crash Risk
Liquidity
Concluding Remarks
References
Chapter 3: How Much to Invest, If Any, in Bitcoin?
Introduction
A Look at the Literature
Portfolio Analysis and the Black-Litterman Model
Data
Results
Additional Considerations
Conclusion
References
Chapter 4: Global Central Bank Digital Currency Research and Developments: Implication for Cryptocurrency
4.1 Introduction
4.2 Conceptual Background
4.2.1 CBDC Definitions
4.2.2 Similarities and Differences between CBDCs and Cryptocurrencies
4.3 CBDC Research and Developments around the World
4.3.1 Recent CBDC Research in the Literature
4.3.2 CBDC Developments in Africa
4.3.3 CBDC Developments in Europe
4.3.4 CBDC Developments in the Region of the Americas
4.3.5 CBDC Developments in Asia
4.3.6 CBDC Developments in Oceania
4.3.7 Global Interest in Information about CBDC
4.4 CBDC Adoption: Implications for Cryptocurrency
4.5 Conclusion
References
Chapter 5: Blockchain Governance: To Govern, or Not to Govern?
Theoretical Approaches to Blockchain Governance
Micro-Level Governance
Infrastructure Architecture
Application Architecture
Interoperability
Meso-Level Governance
Decision-Making Mechanism
Incentive Mechanism
Consensus Mechanism
Macro-Level Governance
Power Distribution
Accountability Mechanism
Control Mechanism
Conclusion
References
Chapter 6: Cryptocurrency Crime
Introduction
Crypto-Enabled and Crypto-Dependent Crimes
Characteristics of Cryptocurrencies That Facilitate Crime
Types of Cryptocurrency Crimes
Fraud
Other Cybercrimes
Cryptocurrency Mining Crimes
Money Laundering
Terrorism Financing
Sanctions Evasion
Tax Evasion
Darknet Marketplaces
Bribery and Corruption
Cryptocurrency-Adjacent Crimes
Crime Risks Associated with Specific Types of Cryptocurrency Technology
DeFi Crime Risks
NFT Crime Risks
Conclusions
References
Chapter 7: Following the Virtual Money: Investigating Crypto-Based Money Laundering and Confiscating Virtual Assets
The Crypto Bombshell
See No Evil, Hear No Evil, Investigate No Evil
Moving under the Radar
Basic Elements That All Investigators Need to Know
Analyzing the Blockchain
How Heuristics Help
Linking Clusters to the Real World
The Regulation Dilemma
How to Harmonize Regulations in a Borderless Industry
International Standards in Practice
Implementation—Patchy but Positive
Law Enforcement: Staying One Step Ahead
From 0 to 100 in Just a Few Years
New Investigative Possibilities
Sidebar: “Welcome to Video”: Taking Down the Biggest Child Abuse Website
Cooperation Across Borders and with VASPs
Hosted vs Unhosted Wallets
Emerging Criminal Strategies
Catching the Wave
A Snapshot of Criminal Strategies
Confiscation: Deterring Crypto-Enabled Crime
Seeking the Key to the Crypto Treasure
Crypto before the Court
Chapter 8: Regulatory and Legal Issues in Cryptocurrencies
Introduction
Major Legal Concerns in Cryptocurrency
Hacks and Thefts
Frauds and Scams
Money Laundering and Tax Evasion
Terrorist Financing and Rogue Actors
A Spectrum of Regulatory Responses
International Harmonization Efforts
Concluding Remarks
References
Chapter 9: Cryptocurrencies, Blockchain, and Public Choice
Introduction
Cryptocurrency, Blockchain, and Decentralized Autonomous Organizations (DAO)
Smart Contracts
Illustrative Case 1: Questions of Voting: Unanimity, Parties, Coalitions/Interest Groups
Public Choice Issue 1: Unanimity
Public Choice Issue 2: Parties and Vote-Trading
Public Choice Issue 3: Special Interest Groups
The Impact of Innovative Crypto-Linked Technology on Voting and Unanimity Rules
Understanding Political Parties and Their Influence
Illustrative Case 2: Questions of Law and Contracts
Public Choice
Smart Contracts and the Law
Illustrative Case 3: Regulation and Governance
Examples from Crypto Regulation
Conclusion
References
Chapter 10: Bitcoin Is King
I. Introduction
II. Function
III. Fit
Lack of Banking
High Inflation
Transaction Costs
Capital Controls
IV. Founding
Bootstrapping Money
Leaderless Money
From Founding to Now
V. Layer Zero
VI. Implications
Policy-Making
Journalism
Research
VII. Conclusion
References
Chapter 11: Cryptocurrency Options Strategy, Analysis, and Valuation
Equity and Cryptocurrency Option Markets: Overview
Uncovered (Naked) Option Trading Strategy Contracts
Buying Call Options
Buying Put Options
Selling Call and Put Options
Buying and Selling Straddles
Covered Option Trading Strategy Contracts
Protective Put Strategy
Covered Call Strategy
Collars
Advanced Option Trading Strategies
Bull Call Vertical Spreads
Bear Put Vertical Spreads
Bull Put Vertical Spreads
Bear Call Vertical Spreads
Option Valuation Methods
Binomial Option Pricing Model: Single-Period Probability Method
Binomial Option Pricing Model: Two-Period Probability Method
Black-Scholes-Merton (BSM) Model
Other Statistical Concepts
1. Compounding Using Exponential (e)
2. Natural Logarithm (ln)
3. Normal Probability Distribution (N)
Put Call Parity
Hedge Ratio (h) and Leverage (Borrowing) Methods: Using BOPM
Summary
Chapter 12: The Role of Blockchain and Smart Contracts in International Relations
12.1 Introduction
12.2 Models of International Relations
12.2.1 The Rational Actor Model
12.2.2 The Organizational Behavior Model
12.2.3 The Governmental Model
12.3 Conclusion
References
Glossary
Index