The 10 most popular crypto and blockchain research papers of 2018
"No other areas of research have matched the rapid growth of topics like bitcoin and blockchain."
"Looking back at the research environment in 2018, we have seen that fintech research is in a league of its own: no other areas of research have matched the rapid growth of topics like bitcoin and blockchain," said Gregg Gordon, managing director at SSRN.
In the past two years, over 550,000 fintech-related pre-prints and early stage research papers have been downloaded from SSRN. This is compared to 160,000 big data papers and under 50,000 "fake news" research papers.
Here are the top 10 that everyone's been reading (or at least downloading) in the last two years.
If you're looking for some in-depth crypto bedtime reading, one of these might fit the bill. But if they just put you right to sleep, then one of these might fit the bill instead.
- Is Bitcoin Really Un-Tethered? by John Griffin and Amin Shams
This paper was widely reported on after its release and is considered some of the strongest evidence to date that Tether is being used to manipulate the cryptocurrency markets.
It details the use of an algorithm that tracks patterns between the Tether printing press and bitcoin prices, and it finds a strong correlation between Tether printing runs and major bitcoin price movements. It also "suggests incomplete Tether backing before month-ends," the researchers say.
The study was originally published in June 2018 but still went on to be one of the most downloaded articles of the last years. It's also been consistently re-reported on as new news throughout the year, much to the consternation of Tether spokespeople.
2. Blockchain Technology: Principles and Applications by Marc Pilkington
This research handbook from 2015 takes a comprehensive dive into the background of blockchain technology and the new pros and cons they bring.
One of its main focuses, beyond giving a fairly comprehensive story of the current (by 2015 standards) state of blockchain, is to untangle some of the controversies around the technology. It notes that the technology is very polarising and splitting opinions among influential researchers in the field.
It strives to take a prudent and balanced approach to the nuts and bolts of the technology through a clear look at the shortcomings and potential solutions, while highlighting the potential it can bring through a series of practical examples.
"While still in their infancy, one should not underestimate the promising socio-economic benefits of these extraordinary technological changes," Pilkington concludes.
3. Some Simple Economics of the Blockchain by Christian Catalini and Joshua Gans
This paper aims to deliver a solid introduction to game theory in blockchain, and judging by its popularity, it succeeds. It focuses on cryptocurrency and the value it can provide, both in dollar amounts and in the context of securing and facilitating a decentralised network.
Its primary focus is the exploration of how valuable digital tokens have the potential to disrupt existing industries by cutting out middlemen, and how networks that can run these tokens might be positioned to change almost everything.
Its abstract also delivers one of the pithiest and most practical explanations of the role of cryptocurrencies in blockchains, saying: "When combined with a native token (as in Bitcoin and Ethereum), a blockchain allows a decentralized network of economic agents to agree, at regular intervals, about the true state of shared data."
It goes on to note that this shared data can represent not only exchanges of currency, but also intellectual property, contracts or information of any kind.
"The resulting marketplaces are characterised by increased competition, lower barriers to entry and innovation, lower privacy and censorship risk, and allow participants within the same ecosystem to support and operate shared infrastructure without assigning power to a platform operator."
In a nutshell, it delivers part of a practical exploration of decentralisation itself.
4. 2017 Global Blockchain Benchmarking Study by Garrick Hileman and Michel Rauchs
This paper steps back and casts a critical eye on the blockchain ecosystem as of September 2017. It contrasts the hype of the time with the nascent reality of the industry, observing the wide range of emerging projects from a realistic angle.
It pays special attention to the importance of blockchain platforms in the industry as a whole, contrasted with their primitiveness. The overall effect it suggests, was a state of inter-dependent projects with a lot of weak links, such as a system that depends on Ethereum finding a quick scaling solution to reach maturity itself.
The researchers presciently anticipated small scale deployments through 2018, with critical infrastructure taking much longer to develop. Overall, it gives a thoroughly comprehensive look at the actual state of blockchain in the real world.
Tech-wise, the fact that its findings are over a year old and are still just as relevant might be a wake-up call in some respects.
5. Decentralized Blockchain Technology and the Rise of Lex Cryptographia by Aaron Wright and Primavera De Filippi
"Lex Cryptographia" was a term coined by the authors to describe the general principle and impacts of "code is law" that underpins many theories of the decentralised space. More specifically, Lex Cryptographia refers to rules administered through self-executing smart contracts and decentralised autonomous organisations.
It points at the potential of decentralised technologies to pull away the ability of authorities to control people's movements and actions to the same extent they used to and explores the pros and cons of a decentralised world.
It points at true individual freedom and emancipation, global markets, smart property, cryptographically activated assets and corruption-free voting on the one hand and the rise of unstoppable illicit activities and global frictions on the other.
Where should programmed rules give way to human judgment or vice versa? How can Lex Cryptographia and global technology successfully accommodate such a diverse planet and such a wide range of beliefs?
It a nutshell, it asks: How should the planet best fulfil the potential of blockchain?
Very carefully, it answers.
6. Cryptocurrencies: A Brief Thematic Review by Usman Chohan
People are pretty keen on this crypto stuff, but they don't, like, actually get it, Chohan says.
Although the paper phrases it as "there is a frenzy around the notion of cryptocurrencies that is not met with a commensurate understanding of their nature."
It doesn't attempt to directly answer any of the big questions in the area, but instead provides a summary of what some of the most pressing questions are and which researchers are trying to answer them in order to serve as a starting point for further research.
7. Initial Coin Offerings and the Value of Crypto Tokens by Christian Catalini and Joshua Gans
In the same vein as their other popular paper (number 3 on the list), Catalini and Gans explore the concept of value in decentralised systems with a specific eye towards ICOs and fundraising.
It doesn't delve too broadly, but instead homes in on one specific burning question: How can an entrepreneur make an absolute mint by launching an ICO?
It approaches the question by exploring a wide range of relevant factors to essentially develop the most comprehensive handbook of ICO best practices to date.
8. The Evolution of Fintech: A New Post-Crisis Paradigm? by Douglas W. Arner, Janos Nathan Barberis and Ross Buckley
This paper takes a deep dive into the history of fintech, going all the way back. Finance as we know it has its origins in the transition from hunter-gatherer societies to settled agricultural states, it argues, and since then has been inextricably linked with technology.
Currency, the abacus, double-entry accounting, insurance, banking, joint stock companies, credit cards, ATMs and other fintech developments were all indispensable elements in human history over the years it notes, and technologies that facilitated financial ties across borders have tended to be some of the most profoundly impactful in the last century or two, it points out.
Cycles of boom and bust around these technologies are similarly impactful, and in turn give rise to new developments. We're a disaster prone species, it suggests, but at least we learn from our mistakes.
Cryptocurrencies and blockchain technology, as a response to the global financial crisis (GFC), might be one of the most important lessons yet. RegTech, it notes, is another equally important addition to the fintech arsenal.
The researchers note that the GFC has resulted in an unprecedented level of scrutiny by regulators, which has had some good results but also a lot of huge expenses, inefficiencies and downsides.
It concludes by encouraging mindful regulation for the purposes of promoting the developments – such as blockchain – which can be used in RegTech.
As the CFTC chairman said, blockchain could have prevented the global financial crisis.
9. Blockchain Technology and Decentralized Governance: Is the State Still Necessary? by Marcella Atzori
Can blockchain technology and decentralised systems usurp government power? Can the technology usher in a new utopia? Is the world on the verge of a radical re-envisioning of the power structures that have guided humanity for thousands of years? Are decentralised autonomous organisations able to replace the role of the state?
No, the paper says. No they cannot.
10. Digital Tulips? Returns to Investors in Initial Coin Offerings by Hugo Benedetti and Leonard Kostovetsky
This paper dives into ICOs by the numbers with the goal of pulling out optimal investment strategies in new projects and uncovering the factors affecting ICO performance.
It discovers that the optimal strategy is to be a rich VC firm with the money to get into pre-sales at a discount, to invest big into legitimate ICOs and shill hard, then dump on gullible main-street investors and walk away as soon as your investment hits an exchange.
Now that's science.