I'm writing my undergrad thesis on Bitcoin and I'd love any input/advice you all might have for me. (Details in comments) (Crosspost /r/Bitcoin)
Hey guys.
I'm in my senior year of my undergrad for economics and I chose to write my thesis on cryptocurrency. Originally I wanted to have a really wide scope and determine if any cryptocurrencies (BTC, ETH, LTC were the 3 I was going to focus on) would become widespread/global currencies. However, my professor correctly pointed out that that was a very wide scope and I needed to narrow down my focus.
Essentially, my aim is to analyze how the costs and payoffs of mining Bitcoin affect the supply, and how that could possibly affect to Bitcoin becoming a widely accepted currency. I chose Bitcoin because I found the most information on it and it's the most recognizable cryptocurrency.
Currently, I have the factors affecting supply as follows:
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Energy costs: using average of monthly residential and commercial rates of electricity in the US (I'm using the average of the two)
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Reward/payoff for mining: fees per block? (I'm not sure if I should use daily fees from here or something from here or total transaction fees)
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Rate of mining: average capacity of high end GPUs (measured in hash rate). Please correct me if this is CPUs. I'm also debating whether to include ASICs in this or if that would be too much.
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Cost of GPUs: average price of aforementioned GPUs (Again, correct me if this is CPUs, I'm not a miner and this is the first real research I've done on this)
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Energy use: Per day, running 24 hrs/day, given a constant average hash rate
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If I can find a way to incorporate Moore's Law into the analysis, I will.
All of this will be measured how it affects the supply (Block rate). This will be done through regression. I'll also discuss the limited supply and what could potentially happen once mining stops.
I aim to conclude with some predictions and discussion of other factors that influence adoption of cryptocurrency (i.e government regulation/opposition, technological limitations, interactions with the banking system, more if I have time.)
Please correct me if you see any flaws in my outline. Thanks for taking the time to read through this, I love this community and really believe that crypto can have real benefits besides simple investing and is here to stay.
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