An Introduction to Cryptocurrencies: The Crypto Market Ecosystem / Edition 1

by Nikos Daskalakis, Panagiotis Georgitseas

Overview

The Crypto Market Ecosystem has emerged as the most profound application of blockchain technology in finance. This textbook adopts an integrated approach, linking traditional functions of the current financial system (payments, traded assets, fundraising, regulation) with the respective functions in the crypto market, in order to facilitate the reader in their understanding of how this new ecosystem works.

The book walks the reader through the main features of the blockchain technology, the definitions, classifications, and distinct characteristics of cryptocurrencies and tokens, how these are evaluated, how funds are raised in the cryptocurrency ecosystem (ICOs), and what the main regulatory approaches are. The authors have compiled more than 100 sources from different sub-fields of economics, finance, and regulation to create a coherent textbook that provides the reader with a clear and easily understandable picture of the new world of encrypted finance and its applications.

The book is primarily aimed at business and finance students, who already have an understanding of the basic principles of how the financial system works, but also targets a more general readership, by virtue of its broader scope and engaging and accessible tone.

Product Details

ISBN-13:	9780367370787
Publisher:	Taylor & Francis
Publication date:	07/21/2020
Series:	Contemporary Issues in Finance
Pages:	98
Product dimensions:	6.12(w) x 9.19(h) x (d)

About the Author

Nikos Daskalakis, PhD, is Assistant Professor in Finance and Accounting in Panteion University, Athens, Greece, and a former member of the Banking Stakeholder Group (BSG) of the European Banking Authority (EBA), the European Crowdfunding Stakeholder Forum (ECSF), and the Financial Services User Group (FSUG) of the European Commission. He is an experienced researcher who has published widely cited articles in numerous top-rated journals, and his scientific interests are on crowdfunding, blockchain applications in finance, and SMEs access to finance.

Panagiotis Georgitseas is an Anti-Money Laundering and Combating Financing of Terrorism Analyst in the Compliance Group at Eurobank and a PhD Candidate in the department of Public Administration in Panteion University of Athens. His prior work experience was in Trade Finance Division (Proton Bank S.A) and in Payment Systems Department (Eurobank). He is member of the Economic Chamber of Greece and his research interests focus on the Economics of Blockchain and to Cryptocurrencies Ecosystem.

Table of Contents

List of figures ix

List of tables x

1 The new era of encrypted finance 1

1.1 The traditional financial system and its main counterparts 1

1.2 The new era of finance: encrypting the financial system 3

1.3 Introducing the main counterparts of the new encrypted financial system 5

2 The infrastructure: the blockchain technology 9

2.1 What is blockchain technology? 9

2.2 How the blockchain technology works 10

2.3 How blockchain mining works 12

2.4 Blockchain consensus mechanisms 13

2.5 Blockchain 2.0: the Ethereum platform 15

2.6 Smart contracts 16

2.7 Alternative uses of blockchain technology 17

3 Traded assets: introduction to cryptocurrencies 20

3.1 Definitions and taxonomy: digital currencies, virtual currencies, cryptocurrencies, and tokens 20

3.2 How cryptocurrency transactions work 24

3.3 Properties and main characteristics of cryptocurrencies 26

3.4 Altcoins (alternative cryptocurrencies) 28

3.5 Trends in the cryptocurrency market 28

3.6 Stablecoins 31

4 "Tokenomics" and valuation 37

4.1 Barriers to pricing and valuation 37

4.2 Token supply and demand model 38

4.3 Quantity theory of money 40

4.4 Token economics of utility 42

4.5 Combining the monetary policies and the economics of utility 42

4.6 The discounted cash flow model 43

4.7 Technical analysis 44

5 Fundraising: initial coin offerings 55

5.1 Defining initial coin offerings 55

5.2 The road to ICOs 56

5.3 How ICOs work 58

5.4 Main features of an ICO 61

5.5 Tokens 61

5.6 The importance of white paper in ICOs 62

5.7 Comparing ICOs with IPOs and crowdfunding 63

6 The regulatory framework 69

6.1 Introduction 69

6.2 United States 70

6.3 Singapore 71

6.4 Canada 72

6.5 China and South Korea 72

6.6 United Kingdom 73

6.7 Australia 74

6.8 Switzerland 74

6.9 Japan 75

6.10 European Union (EU) 76

6.11 Comparative analysis and conclusions of regulatory approaches 77

Index 83