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- Creators: Barrett, The Honors College
- Creators: Benjamin, Victor
Description
Alternative currencies have a long and varied history, in which Bitcoin is the latest chapter. The pseudonymous Satoshi Nakamoto created Bitcoin as an implementation of the concept of a cryptocurrency, or a decentralized currency based on the principles of cryptography. Since its creation in 2008, Bitcoin has had a fairly tumultuous existence that limited its adoption. Wide price fluctuations occurred as the appeal of free money by running a piece of computer software drove people to purchase expensive hardware, and high-profile scandals cast Bitcoin as an unstable currency well-suited primarily for purchasing illicit materials. Consumer confidence in the currency was extremely low, and businesses were extremely hesitant to accept a currency that could easily lose half (or more) of its value overnight. However, recent years have seen the currency begin to stabilize as businesses and mainstream investors have begun to accept and support it. Alternative cryptocurrencies, titled "altcoins," have also been created to fill market niches that Bitcoin was not addressing. Governmental intervention, a concern of many following the currency, has been surprisingly restrained and has actually contributed to its stability. The future of Bitcoin looks very bright as it carries the dream of the alternative currency forward into the 21st century.
ContributorsReardon, Brett (Co-author) / Burke, Ryan (Co-author) / Happel, Stephen (Thesis director) / Boyes, William (Committee member) / School of Politics and Global Studies (Contributor) / Department of Information Systems (Contributor) / Department of Finance (Contributor) / Barrett, The Honors College (Contributor)
Created2016-05
Description
Cryptocurrencies are notorious for its volatility. But with its incredible rise in price, Bitcoin keep being on the top among the trending topics on social media. Although doubts continue to rise with price, Bloomberg even make critics on Bitcoin as ‘the biggest bubble in the history’, some investors still hold strong enthusiasm and confidence towards Bitcoin. As contradicting opinions increase, it is worthy to dive into discussions on social media and use a scientific method to evaluate public’s non-negligible role in crypto price fluctuation.
Sentiment analysis, which is a notably method in text mining, can be used to extract the sentiment from people’s opinion. It then provides us with valuable perception on a topic from the public’s attitude, which create more opportunities for deeper analysis and prediction.
The thesis aims to investigate public’s sentiment towards Bitcoin through analyzing 10 million Bitcoin related tweets and assigning sentiment points on tweets, then using sentiment fluctuation as a factor to predict future crypto fluctuation. Price prediction is achieved by using a machine learning model called Recurrent Neural Network which automatically learns the pattern and generate following results with memory. The analysis revels slight connection between sentiment and crypto currency and the Neural Network model showed a strong connection between sentiment score and future price prediction.
Sentiment analysis, which is a notably method in text mining, can be used to extract the sentiment from people’s opinion. It then provides us with valuable perception on a topic from the public’s attitude, which create more opportunities for deeper analysis and prediction.
The thesis aims to investigate public’s sentiment towards Bitcoin through analyzing 10 million Bitcoin related tweets and assigning sentiment points on tweets, then using sentiment fluctuation as a factor to predict future crypto fluctuation. Price prediction is achieved by using a machine learning model called Recurrent Neural Network which automatically learns the pattern and generate following results with memory. The analysis revels slight connection between sentiment and crypto currency and the Neural Network model showed a strong connection between sentiment score and future price prediction.
ContributorsZhu, Xiaoyu (Author) / Benjamin, Victor (Thesis director) / Qinglai, He (Committee member) / Department of Information Systems (Contributor) / Department of Supply Chain Management (Contributor) / Barrett, The Honors College (Contributor)
Created2018-12
Description
Third-party mixers are used to heighten the anonymity of Bitcoin users. The mixing techniques implemented by these tools are often untraceable on the blockchain, making them appealing to money launderers. This research aims to analyze mixers currently available on the deep web. In addition, an in-depth case study is done on an open-source bitcoin mixer known as Penguin Mixer. A local version of Penguin Mixer was used to visualize mixer behavior under specific scenarios. This study could lead to the identification of vulnerabilities in mixing tools and detection of these tools on the blockchain.
ContributorsPakki, Jaswant (Author) / Doupe, Adam (Thesis director) / Shoshitaishvili, Yan (Committee member) / Computer Science and Engineering Program (Contributor, Contributor) / Barrett, The Honors College (Contributor)
Created2018-12
Description
The purpose of this thesis is to investigate the history of the Bitcoin arbitrage premium to see if the possibility of 'risk-free' gains existed previously and whether or not the opportunity is still present today. It investigates market structure and price discrepancies in $147B of trading volume across 53 different exchanges between July 2010 and February 2017. This paper aggregates exchange trading into five minute buckets of transaction volume in order to see what exchange volume could have been successfully arbitraged within the context of two cases. The first requires trades to close within the same 5-minute interval and the second requires a 10-minute delay before the position is closed. It finds that the monthly average spreads of these cases have fallen below 3% in 2017 from nearly 10% in 2010. Once exchange fees are included, these spreads fall below 2% on average.
ContributorsNowicki, Gregory Arthur (Author) / Wahal, Sunil (Thesis director) / Simonson, Mark (Committee member) / School of Mathematical and Statistical Sciences (Contributor) / Department of Finance (Contributor) / Barrett, The Honors College (Contributor)
Created2017-05
Description
Bitcoin is a form of virtual currency that can be used as a medium of exchange for goods or services. Different from other forms of virtual payment, bitcoin is de-centralized and puts all of the power in the hands of the user, rather than a banking institution. However, bitcoin's ability to develop as a renowned medium of exchange has been impeded, potentially due to a lack of knowledge, active bitcoin platforms, and support. In this paper, I conduct a survey to understand factors that affect households' adoption of bitcoin. In particular, I focus on factors that capture the potential benefit and cost of adopting bitcoin. Through a public survey, participants are asked a series of questions on their willingness to adopt bitcoin. I found significant results stating that subjects were more inclined toward bitcoin contingent upon the number of platforms accepting it, the number of acquaintances using bitcoin, and the degree of personal knowledge participants have about bitcoin. These findings suggest that perceived benefit captured by network effect and convenience of use, as well as the potential cost captured by uncertainty help shape the adoption of bitcoin.
ContributorsMorrissey, Michael Joshua (Author) / Wang, Jessie (Thesis director) / Ray, Colter (Committee member) / Department of Finance (Contributor) / Barrett, The Honors College (Contributor)
Created2016-12
Description
This report is a summary of a long-term project completed by Ido Gilboa for his Honors Thesis. The purpose of this project is to determine if an arbitrage between different crypto-currency exchanges exists, and if it is possible to acts upon such triangular arbitrage. Bitcoin, the specific crypto-currency this report focuses on, has become a household name, yet most do not understand its origin and patterns. The report will detail the process of collecting data from different sources, manipulating it in order to run the algorithms, explain the meaning behind the algorithms, results and important statistics found, and conclusion of the project. In addition to that, the report will go into detail discussing financial terms such as triangular arbitrage as well as information system concepts such as sockets and server communication. The project was completed with the assistance of Dr. Sunil Wahal and Dr. Daniel Mazzola, professors in the W.P. Carey School of business. This project has been stretched over along period of time, spanning from early 2013 to fall of 2015.
ContributorsGilboa, Ido (Author) / Wahal, Sunil (Thesis director) / Mazzola, Daniel (Committee member) / Department of Information Systems (Contributor) / Department of Supply Chain Management (Contributor) / Barrett, The Honors College (Contributor)
Created2015-12
Description
In recent years, cryptocurrency has become an increasingly popular new alternative investment
among retail traders. Additionally, this attention has grown beyond retail traders and now presents itself as a prominent conversation among media, institutions, and academia. The purpose of this project is to explore the unappreciated aspect of cryptocurrency use such that it is capable of functioning in the foreign exchange markets (FOREX or FX markets). The inherent idea behind cryptocurrency is that it is accessible worldwide, protected, and verifiable via blockchain, holding the same monetary value regardless of location and minimizing the cost of cross-border payments by eliminating financial intermediaries in the traditional FOREX currency markets. Moreover, the goal of cryptocurrency intends to operate at faster rates than current traditional finance intermediaries. The article incorporates frequently debated aspects of cryptocurrency to identify the advantages and limitations of both cryptocurrency and traditional monetary systems. Thus, this research reveals the necessary fundamentals needed in cryptocurrency for the evolution in traditional financial structures and for widespread adoption to occur.
ContributorsKrygier, Jakob (Author) / Van Orden, Joseph (Thesis director) / Hill, John (Committee member) / Barrett, The Honors College (Contributor) / Department of Finance (Contributor) / Dean, W.P. Carey School of Business (Contributor) / Department of Economics (Contributor)
Created2023-05
Description
This thesis addresses the widespread questions asked of Bitcoin. Cryptocurrencies - decentralized ledgers of peer to peer transactions – have taken the world by storm, with Bitcoin leading the way by means of being the original, most valuable, and most popular. Despite this widespread use, skepticism remains as to what Bitcoin is and whether it counts as money. I first defend the framework that I use for understanding Social Objects, Searle’s X counts as Y in C formula, as money is undoubtedly a social object. I then argue that Smit et al.’s account of money, while useful, mistakenly identifies an essential characteristic of money, the relative ratio scale, as a feature. I therefore present an alternative account of money. I then explain why the most commonly held account of Bitcoin, the chain Definition fails, and why Bitcoin being a fictional substance is not a problem for Bitcoin being money. I then demonstrate Bitcoin’s compatibility with my alternative account, and from this conclude that Bitcoin is Money.
ContributorsRistic, Nikola (Author) / McElhoes, David (Thesis director) / Botham, Thad (Committee member) / Barrett, The Honors College (Contributor) / Historical, Philosophical & Religious Studies, Sch (Contributor) / Dean, W.P. Carey School of Business (Contributor)
Created2023-05
Description
This thesis examines the usefulness of cryptocurrency and provides a research-backed conclusion on the future of this digital currency. This starts with a look into the history of fiat moneys: how they were originally created, how they were implemented in past governments, and the resulting interactions between the currency and its users. The countries that were chosen for exploration demonstrate a few common trends throughout their execution of fiat currency. It is through the relationships dating all the way back to the Ancient Romans to the recent problems in Venezuela that provide a well-rounded scope of the issues. However, there have also been a few instances in which fiat currency has been successfully integrated, which furthers the advocacy towards an eventual implementation of government-regulated cryptocurrency.
This leads into an examination on the history of one cryptocurrency in particular, Bitcoin. This analysis includes the effects of the cryptomarket and the impact that it has had on various economies. Additionally, the blockchain is explored by first defining what it is and then its potential and current uses not only in the cryptomarket industry, but others as well. This includes a focus on the real estate market as well as banking. Using knowledge gained about the history of fiat money, cryptocurrencies, and the usefulness of the blockchain, this thesis compares the history of fiat currencies with the current implementation of cryptocurrency. Furthermore, the pros and cons of the possible implementation of cryptocurrency helps to provide an outlook on whether it can eventually be government regulated.
This leads into an examination on the history of one cryptocurrency in particular, Bitcoin. This analysis includes the effects of the cryptomarket and the impact that it has had on various economies. Additionally, the blockchain is explored by first defining what it is and then its potential and current uses not only in the cryptomarket industry, but others as well. This includes a focus on the real estate market as well as banking. Using knowledge gained about the history of fiat money, cryptocurrencies, and the usefulness of the blockchain, this thesis compares the history of fiat currencies with the current implementation of cryptocurrency. Furthermore, the pros and cons of the possible implementation of cryptocurrency helps to provide an outlook on whether it can eventually be government regulated.
ContributorsKaplan, Samuel Alexander (Co-author) / Vincetic, Nicholas (Co-author) / Niebuhr, Robert (Thesis director) / McDaniel, Cara (Committee member) / Mechanical and Aerospace Engineering Program (Contributor) / Barrett, The Honors College (Contributor)
Created2019-05
Description
In this paper I defend the argument that public reaction to news headlines correlates with the short-term price direction of Bitcoin. I collected a month's worth of Bitcoin data consisting of news headlines, tweets, and the price of the cryptocurrency. I fed this data into a Long Short-Term Memory Neural Network and built a model that predicted Bitcoin price for a new timeframe. The model correctly predicted 75% of test set price trends on 3.25 hour time intervals. This is higher than the 53.57% accuracy tested with a Bitcoin price model without sentiment data. I concluded public reaction to Bitcoin news headlines has an effect on the short-term price direction of the cryptocurrency. Investors can use my model to help them in their decision-making process when making short-term Bitcoin investment decisions.
ContributorsSteinberg, Sam (Author) / Boscovic, Dragan (Thesis director) / Davulcu, Hasan (Committee member) / Computer Science and Engineering Program (Contributor) / Barrett, The Honors College (Contributor)
Created2020-05