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MoneroResearch.info |
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Goorha, P. Principles of natural resource economics for bitcoin. The Journal of The British Blockchain Association, 4(August). Added by: endor (2022-03-31 13:25) Last edited by: endor (2022-04-14 20:14) |
| Resource type: Journal Article DOI: https://doi.org/10.31585/jbba-4-2-(2)2021 BibTeX citation key: Goorha View all bibliographic details  |
Categories: Not Monero-focused Keywords: bitcoin Proof of Work Mining Exhaustible Resources Inventory Policy Creators: Goorha Collection: The Journal of The British Blockchain Association |
Views: 40/1701
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Attachments
27192-principles-of-natural-resource-economics-for-bitcoin.pdf  [14/836]
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URLs https://jbba.schol ... nomics-for-bitcoin |
| Abstract |
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To assess claims such as Bitcoin is ‘digital gold’ it makes sense to examine whether Bitcoin exhibits features common to other exhaustible natural resources that are the concern of natural resource economists. We therefore present some foundational ideas in the economics of exhaustible resources and examine their relevance to Bitcoin. There are several useful similarities but also some key differences, chiefly with respect to how miners manage inventories, or their ‘inventory policy’. Therefore, to highlight this aspect, we use a simple model for any physical natural resource and introduce sensitivity to a capital-to-energy ratio. The resulting policy for Bitcoin miner over a halving cycle is not unlike a traditional miner in that optimal inventories are determined by optimal capital investments over the entire duration of the cycle.
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