Bitcoin — The Cryptocurrency Medium of Exchange, Purchasing Power, and Longterm Store of Value

Bc. Dominik Vlasák, BSc

Diplomová práce

Abstract:

The diploma thesis looks at Bitcoin and bitcoins; the world’s first mainstream digital and decentralized form of cryptocurrency. Money and Bitcoin are analyzed from medium of exchange, purchasing power, and longterm store of value perspectives. The history, origin, use, storage, acceptance, transaction abilities and costs, market dominance, valuation, volatility, and wealth distribution of currencies and bitcoins are examined. Alternatives such as gold or other currencies are also taken into consideration. The demand-side economies of scale are explained using Metcalfe’s Law and a multiple regression analysis is performed, helping explain the rise in bitcoin’s market price due to the network affect. Although not extraordinarily cost effective, bitcoin mining profitability is calculated with several scenarios, identifying possible use cases where mining is justifiable, even in the year 2018. As a result, the thesis includes hundreds of hours worth of research condensed into a general understanding of bitcoin and its economics, providing the reader with knowledge to make his or her own informed decision about potential involvement with the cryptocurrency.

Keywords

Bitcoin, blockchain economics, cryptocurrencies, virtual money, digital asset

Jazyk práce: angličtina

Datum vytvoření / odevzdání či podání práce: 31. 3. 2018

Obhajoba závěrečné práce

• Vedoucí: Ing. Petr Procházka, MSc Ph.D.

Česká zemědělská univerzita v Praze

Provozně ekonomická fakulta

Magisterský studijní program / obor:
Economics and Management / Economics and Management