Superabundant design

Tiziana Terranova draws attention to the necessity of questioning how algorithmically enabled automation works “in terms of control and monetization” and “what kind of time and energy” is being subsumed by it (Terranova 387). Cryptocurrencies are payment technologies that automate the production of money-like tokens (Bergstra and Weijland) following algorithmic rules to maintain a fixed production rate. Different kinds of energy and residues, which are not always acknowledged, are involved in this process. Here I distinguish between two closely linked layers in the Bitcoin token production: first, an algorithmic layer, which contains the instructions and rules for the creation of bitcoins; second, a hardware layer, which performs and embodies the former. While these layers work together, I will argue that they enact their own kind of logics of energy and waste. I will begin at the more visible end of the production cycle, the hardware layer, where the definition of waste and energy consumption is shared with many electronic devices; then I will trace back its algorithmic layer, which as I argue, follows a different logic

SHAREDWEALTH: A CRYPTOCURRENCY TO REWARD MINERS EVENLY

Bitcoin [19] is a decentralized cryptocurrency that has recently gained popularity and has emerged as a popular medium of exchange. The total market capitalization is around 1.5 billion US dollars as of October 2013 [28]. All the operations of Bitcoin are maintained in a distributed public global ledger known as a block chain which consists of all the successful transactions that have ever taken place. The security of a block chain is maintained by a chain of cryptographic puzzles solved by participants called miners, who in return are rewarded with bitcoins. To be successful, the miner has to put in his resources to solve the cryptographic puzzle (also known as a proof of work). The reward structure is an incentive for miners to contribute their computational resources and is also essential to the currency\u27s decentralized nature. One disadvantage of the reward structure is that the payment system is uneven. The reward is always given to one person. Hence people form mining pools where every member of the pool solves the same cryptographic puzzle and irrespective of the person who solved it, the reward is shared evenly among all the members of the pool. The Bitcoin protocol assumes that the miners are honest and they follow the Bitcoin protocol as prescribed. If group of selfish miners comes to lead by forming pools, the currency stops being decentralized and comes under the control of the selfish miners. Such miners can control the whole Bitcoin network [29]. Our goal is to address this problem by creating a distinct peer-to-peer protocol that reduces the incentives for the miners to join large mining pools. The central idea is to pay the “runners-up” who come close to finding a proof, thereby creating a less volatile payout situation. The work done by the “runners-up” can be used by other miners to find the solution of proof of work by building upon their work. Once they find the actual solution they have to include the solution of the other miner in order to get rewarded. The benefit of this protocol is that not only the miners save their computational resources but also the reward is distributed among the miners

Bitcoin: Bubble or Blockchain?

Abstract. This paper sets out a brief, deliberately non-technical, overview of Bitcoin, a new, but becoming more mainstream, crypto currency, generated and managed by a distributed multi-agent system. Bitcoin was developed in late 2008 by "Satoshi Nakamoto". The nature of Bitcoin as a disruptive currency, payments system and asset, is juxtaposed against the potential for its transactional ledger, the blockchain, to usher in a revolutionary way of recording "digital truth". The main contribution of this paper is to progress the debate around Bitcoin beyond the technical and towards legal and ethical issues and the nature of money and memory itself

The Impact of Layer 2 Technologies on the Adoption and Security of Blockchain

Numerous studies have raised concerns over the limited scalability of blockchain technologies and, in particular, Bitcoin. Layer 2 technologies have emerged as an advanced array of complementary innovations designed to solve this problem. Despite the growing optimism around layer 2 technologies, however, there is little evidence to show how they impact blockchain’s long-term success. This paper argues that the use and expansion of layer 2 technologies have a positive impact on the adoption and security levels of the underlying blockchain systems. Building on the Bitcoin and Lightning Network case, we use a time-series model based on 1,494 daily observations to demonstrate that the growing activity on the Lightning Network precipitates increased use and better security for Bitcoin. These results highlight the importance of layer 2 technologies for blockchain systems and suggest several further research avenues in this nascent domain of inquiry

FIELDS OF POTENTIAL USE OF CRYPTOCURRENCIES IN THE PAYMENT SERVICES MARKET IN POLAND – RESULTS OF AN EMPIRICAL STUDY

The payment services market in Poland is particularly open to new payment solutions. The most important financial innovations of the recent years include cryptocurrencies. Bitcoin is the most well-known of them and its applications cover payments and investments. The article aims to determine the potential for using cryptocurrencies in individual segments of the payment services market in Poland. The paper considers the following research hypothesis: Representatives of the financial sector see a potential for a widespread use of cryptocurrencies in the payment services sector in Poland. The aim of the paper was achieved and the hypothesis verified on the basis of selected results of a survey among representatives of institutions operating in the financial market in Poland. The study, primarily carried out by the author, presents the opinions of experts representing the broadly understood community of professionals from the payment services market in Poland. Their views concern the directions in which innovations in the payment services sector may develop and the prospects for the use of cryptocurrencies in that area.</p

Покриття пандемії коронавірусу через міри ентропії

The rapidly evolving coronavirus pandemic brings a devastating effect on the entire world and its econ- omy as a whole. Further instability related to COVID-19 will negatively affect not only on companies and financial markets, but also on traders and investors that have been interested in saving their investment, minimizing risks, and making decisions such as how to manage their resources, how much to consume and save, when to buy or sell stocks, etc., and these decisions depend on the expectation of when to expect next critical change. Trying to help people in their subsequent decisions, we demonstrate the possibility of constructing indicators of critical and crash phenomena on the example of Bitcoin market crashes for further demonstration of their efficiency on the crash that is related to the coronavirus pandemic. For this purpose, the methods of the theory of complex systems have been used. Since the theory of complex systems has quite an extensive toolkit for exploring the nonlinear complex system, we take a look at the application of the concept of entropy in finance and use this concept to construct 6 effective entropy measures: Shannon entropy, Approximate entropy, Permutation entropy, and 3 Recurrence based entropies. We provide computational results that prove that these indicators could have been used to identify the beginning of the crash and predict the future course of events associated with the current pandemic.Швидко розвивається пандемія коронавірусу має руйнівний вплив на весь світ та його економіку в цілому. Подальша нестабільність, пов'язана з COVID-19, негативно позначиться не тільки на компаніях та фінансових ринках, але й на трейдерах та інвесторах, які зацікавлені в економії своїх інвестицій, мінімізації ризиків та прийнятті рішень, наприклад, як керувати своїми ресурсами, наскільки споживати та економити, коли купувати чи продавати акції тощо, і ці рішення залежать від очікування, коли очікувати наступної критичної зміни. Намагаючись допомогти людям у прийнятті ними подальших рішень, ми демонструємо можливість побудови показників критичних явищ та аварійних ситуацій на прикладі падіння ринку біткойнів для подальшої демонстрації їх ефективності у випадку краху, пов'язаного з пандемією коронавірусу. Для цього були використані методи теорії складних систем. Оскільки теорія складних систем має досить широкий набір інструментів для дослідження нелінійної складної системи, ми розглянемо застосування поняття ентропії у фінансах і використовуємо це поняття для побудови 6 ефективних заходів ентропії: ентропія Шеннона, наближена ентропія, перестановка ентропії та 3 ентропії на основі рекурентності. Ми надаємо обчислювальні результати, які доводять, що ці показники могли бути використані для ідентифікації початку аварії та прогнозування майбутнього перебігу подій, пов’язаних із поточною пандемією