Neil Gandal, 15 January 2021

What is behind the pinballing price movements of Bitcoin? Neil Gandal tells Tim Phillips how supply and demand works for cryptocurrencies.

You can download Neil's paper, The Microeconomics of Cryptocurrencies (Neil Gandal, Joshua Gans, Guillaume Haeringer, Hanna Halaburda), free here

Hanna Halaburda, Guillaume Haeringer, Neil Gandal, Joshua Gans, 29 July 2020

Since its launch in 2009, there has been increasing interest in Bitcoin and other cryptocurrencies. Initially mostly discussed in popular media, more recently a growing body of academic research has emerged on the topic, spanning many fields such as macroeconomics, law and economics, and computer science. This column focuses on the microeconomics of cryptocurrencies, specifically on their supply, demand, trading price, and the competition amongst different cryptocurrencies. It summarises the main findings in this literature over the past decade and establishes a base for future research.

Makoto Yano, 14 April 2020

Data are the new resource in the modern production process. Building a high-quality market where this resource is shared, distributed, and used requires first establishing its ownership. This column argues that blockchain technology can be harnessed to effectively assign data ownership and develop a healthy cyber ecosystem. Ensuring the rights of individuals who generate data is crucial to preventing unnecessary erosions of market quality. However, forming a healthy ecosystem will not happen spontaneously, and will require careful planning and the expertise from multiple fields.

Joshua Gans, Neil Gandal, 06 February 2020

Cryptocurrencies such as Bitcoin rely on a ‘proof of work’ scheme to allow nodes in the network to ‘agree’ to append a block of transactions to the blockchain, but this scheme requires real resources (a cost) from the node. This column examines an alternative consensus mechanism in the form of proof-of-stake protocols. It finds that an economically sustainable network will involve the same cost, regardless of whether it is proof of work or proof of stake. It also suggests that permissioned networks will not be able to economise on costs relative to permissionless networks.

Tobias Adrian, Tommaso Mancini-Griffoli, 09 September 2019

New entrants are vying to occupy the space once used by paper bills. This column, part of the VoxEU debate on the future of digital money, proposes a simple framework to make sense of who is attempting to pry our wallets open. It argues that the adoption of new digital means of payment could be rapid and bring significant benefits to customers and society, but that the risks must be tackled with innovative approaches and heightened collaboration across borders and sectors. One approach is for central banks to engage in a public–private partnership with fintech firms to provide a safe, liquid, and digital alternative to cash: synthetic central bank digital currency.

Siddharth Bhambhwani, Stefanos Delikouras, George Korniotis, 24 August 2019

We do not know which characteristics affect cryptocurrency prices, if any. The column argues that there are two fundamental factors that drive prices in the long run: the trustworthiness of the cryptocurrency’s blockchain and the adoption of the blockchain. Cryptocurrencies such as Bitcoin, Ethereum, and Monero are affected by these fundamentals. In some periods prices deviate, but eventually retrace the trend.

Molly Lesher, Jan Tscheke, 25 July 2019

E-commerce facilitates trade across borders, increases convenience for consumers, and enables firms to reach new markets. This column identifies a range of digital technologies and the new business models they enable that are driving dynamism in e-commerce markets. Despite this dynamism, however, important gaps remain with regard to e-commerce participation among firms and different groups of individuals. Targeted polices are needed to provide the regulatory flexibility for new business models to thrive and to ensure that e-commerce becomes more inclusive.

Raphael Auer, 08 March 2019

Bitcoin and related cryptocurrencies are exchanged via simple technical protocols for communication between participants, as well as a publicly shared ledger of transactions known as a blockchain. This column discusses research on how cryptocurrencies verify that payments are final, that is, that they are irreversible once written into the blockchain. It points to the high costs of achieving such finality via ‘proof-of-work’ and to a crucial externality in the transaction market, and argues that with the current technology, the liquidity of cryptocurrencies is set to shrink dramatically in the years to come.

Sayuri Shirai, 06 March 2019

Recent years have seen the emergence of digital currencies such as Bitcoin as potential private sector money. Central banks are also considering whether to issue their own digital tokens to enable decentralised verification of transactions while maintaining attractive cash-like features. This column lays out the four existing proposals for implementing central bank digital currency. Due largely to technical constraints, however, central banks in general have not found a compelling reason to issue their own digital currency.

Antonio Fatás, 05 March 2019

In recent years, the arrival of new financial technologies has opened a debate about the extent of their implications for the nature of money, the way new ventures are funded, and so on. This column introduces a new Vox eBook that summarises current research on the impact of these changes and how to manage the possible disruption in financial markets, where governance and regulation are central.

JT Hamrick, Farhang Rouhi, Arghya Mukherjee, Amir Feder, Neil Gandal, Tyler Moore, Marie Vasek, 09 January 2019

The surge of interest in cryptocurrencies has been accompanied by a proliferation of fraud, largely in the form of pump and dump schemes. This column provides the first measure of the scope of such schemes across cryptocurrencies. The results suggest that the phenomenon is widespread and often quite profitable, and highlight the need for concerted efforts from industry and regulators to fight cryptocurrency price manipulation. 

, 22 October 2018

Blockchain technology has a real potential to be a catalyst in the world of finance, offering new ways to intermediate capital risk and incite change in the financial sector. That's what the audience heard at a CEPR conference held at ING's London headquarters. But how much of this new technology is really understood? And is there a danger that hype is overshadowing reality?

Lin William Cong, Ye Li, Neng Wang, 05 October 2018

Cryptocurrencies, tokens, and the blockchain technology upon which these platforms are built hold considerable potential for financial architectures. This column presents a dynamic asset valuation model of cryptocurrencies and tokens on blockchain-based platforms. Price dynamics in the model feature explosive growth of the user base after an initial period of dormant adoption, accompanied by a run-up of token price volatility, in line with existing evidence. The findings highlight how the value of the tokens depends on user base, the quality of the blockchain platform, and users’ expectations of future token price dynamics. 


Technology greatly expanded the set of possible market/payment structures. Which ones look good on paper? And, will they work? Is regulatory intervention needed? This conference will take on these first-order topics.

  • What set of new market/payment structures did technology bring within reach?
  • What structure is desirable? Does it need regulatory intervention?
  • Is Mifid II adequate, or do we need Mifid III?

This conference explores how technology is changing securities markets. The preliminary programme consists of three panel sessions covering three broad themes. Each session will start with a 20-minute talk by a keynote speaker, followed by a panel session.

The conference is by invitation-only. If you wish to be considered for participation, please register your interest here.

Stephen Cecchetti, Kim Schoenholtz, 28 August 2018

We are constantly bombarded by reports of how blockchain technology will change the world. This column describes the technology, the problem it is designed to solve, and the impact it might have on finance. Conceivably, a blockchain system could securely track the ownership of every financial instrument and exposure in the global economy. While this is a very tall order, it would be truly revolutionary. In practice, however, we are still a long way off.

Markus K Brunnermeier, Joseph Abadi, 17 July 2018

Cryptocurrencies and the underlying distributed ledger technology have exploded into public consciousness over the last few years, with devotees insisting that the technology will revolutionise financial transactions and ownership data. This column identifies a ‘blockchain trilemma’ whereby no ledger can fully satisfy the three desirable properties of decentralisation, correctness, and cost-efficiency. It further explains how distributed ledgers enhance competition but introduce costs above and beyond the well-known electricity costs.

Michael Casey, Jonah Crane, Gary Gensler, Simon Johnson, Neha Narula, 16 July 2018

The idea of a new software system that powers a consensus-driven form of shared record keeping has already had a profound effect, encouraging rapid and substantial investment in what is now commonly referred to as blockchain technology. This column introduces the latest Geneva Report on the World Economy, which assesses the available evidence and likely impact for this technology across a wide range of applications and explores the potential use cases for the financial sector, and the ways in which the organisation of these activities may change over time.

Simon Johnson, 16 July 2018

Blockchain technology has the potential to be a catalyst for change to incumbent financial sector firms. In this Vox Talk, Tim Phillips talks to Simon Johnson, one of the authors of the latest Geneva Report on the World Economy which looks at the technology and its possible applications. 

Lin William Cong, Zhiguo He, 05 July 2018

Blockchain technology provides decentralised consensus, which potentially enlarges the contracting space using tamper-proof smart contracts. But this implies distributed information. The column argues that there is a tension between these two features of blockchain. While complete contracts may increase competition, distributed information may also make collusion between incumbents more effective. 

Antonio Fatás, Beatrice Weder di Mauro, 07 May 2018

Economists have been dismissive of cryptocurrencies, but fintech entrepreneurs and enthusiasts continue to see their disruptive potential. This column considers the theoretical and practical arguments on both sides of the debate. Traditional currencies are overwhelmingly superior as forms of money, and cryptocurrencies’ advantage in terms of lax regulation is unlikely to last. There remains, however, ample potential for innovation in payment systems.



CEPR Policy Research