Kaal claims by topic: economics, page 2

907 atomic, individually citable claims from the published work of Wulf A. Kaal tagged economics.

By some estimates the lack of inclusion of minorities in corporate America costs the U.S. economy one trillion dollars per year once the pay gap between whites and minorities is taken into account. 2017
Because transacting parties judge transaction parameters and products on quality perceptions rather than on less rational and biased factors, quality becomes the true deciding factor in the marketplace, which eliminates prejudices. 2017
Eliminating bias-driven inefficiencies removes the associated diseconomies of scale and waste, estimated at around one trillion dollars annually in the existing centralized business infrastructure. 2017
Unlike traditional hierarchical organizations where face-time and unproductive meetings are the norm, the self-governing DAO token optimizer avoids corporate hierarchy inefficiencies and the bad outcomes that come from top-down direction. 2017
Equality is a natural byproduct of the blockchain-driven evolution of the crypto economy, because the trust enhancing consensus model, smart contracting in anonymous networks, and DAOs together allow a more equal society to evolve. 2017
If the jurisdictional means necessary for conflict resolution mechanisms covering Ethereum blockchain based smart contracting are absent, consumers will mistrust the new technology, and that mistrust can undermine the evolution of the blockchain based crypto economy. 2017
Regulating blockchain through the non anonymous application of the technology creates large inefficiencies that will be bypassed by the more efficient anonymous applications, and it is for those more advanced applications that a system of distributed jurisdiction will be needed. 2017
Hybrid approaches and meta structures that connect the existing legal and regulatory infrastructure with blockchain based smart contracting will accelerate rather than slow the bifurcation of the jurisdictional infrastructure into traditional and crypto prongs. 2017
The legacy infrastructure bridge between fiat and crypto currencies accelerates the growth of the blockchain based economy and infrastructure, but it cannot curtail the anonymous nature of that economy. 2017
As blockchain use grows, node operation will eventually require special equipment affordable only by large corporations in the existing legal infrastructure, creating the possibility of dangerous centralization and a threat to anonymity. 2017
Without judge expertise in the subject matter of a smart contract dispute, user confidence in effective and fair conflict resolution is undermined, which reduces confidence in crypto transactions as a whole and can undermine the evolution of the crypto economy. 2017
Because of the fees attached to its extra verification layer, the OpenBazaar dispute resolution mechanism creates substantial transaction costs that pure Ethereum based self executing smart contracts avoid. 2017
In contrast with OpenBazaar, the authors' proposed open source ecosystem allows dispute resolution only if and when a smart contract has actually resulted in a dispute, which keeps smart contracting transaction costs near zero. 2017
For crypto economy participants who wish to minimize the transaction costs of dual integration and retain anonymity, the authors' proposed open source platform ecosystem is more likely than all other available solutions to provide legal equivalence of dispute resolution mechanisms. 2017
Contingent capital may be more efficient than simply raising capital requirements, because the capital injection is available only when it is needed and, when triggered, only as much of the contingent capital converts as is necessary to recapitalize the firm. 2017
Initial Coin Offerings are the most efficient means of financing entrepreneurial initiatives in the history of capital formation, because they minimize transaction cost and democratize finance while dis-intermediating banks. 2017
Because whitepapers are not audited by any authority, the preliminary steps of the ICO roadmap, project announcement, executive summary, and investor comments, carry the burden of building market credibility and investor trust in the soundness of the project. 2017
The pre-ICO price of a cryptocurrency is set arbitrarily by the start-up team that structured the offering, while post-ICO price dynamics are left to supply and demand determined by the network of participants rather than any central authority. 2017
The rapid evolution of ICOs was enabled in part by the negative factors that had depressed start-up fundraising, namely post crisis banking regulation and a shadow banking sector that only marginally supports new ventures and highly innovative start-ups. 2017
An issuer can pre-define monetary policy in crypto economics by fixing the number of tokens created and issued, and a maximum token issuance combined with controlled token supply releases can make small increases in demand drive token prices higher. 2017
To avoid a token price crash, token escrow accounts should provide usage and access controls that assure investors escrowed tokens will not be issued at a discount, and lockups or phased releases of escrowed tokens further minimize crash risk. 2017
The trend of ICO issuance exceeding venture capital financing can be expected to continue, because ICOs allocate capital more efficiently and at lower cost. 2017
Because token offerings are built on open source code, the utility of an issued token can at any time be recreated in another token with essentially identical features at marginal cost, so investors cannot rely on the implicit promise that promoters and developers will increase the value of the acquired token rather than launch a duplicate. 2017
Identifying legitimate projects and distinguishing them from scams is a necessary condition both for investor protection and for creating the conditions in which ICOs can proliferate. 2017
Zombie ICOs, which have little chance of creating a successful market for their tokens, became increasingly common in 2017 and are identifiable by their inability to answer core questions about the problem solved, the allocation of proceeds, the viability of the product, and the team's business experience. 2017
An ICO that proposes an uncapped raise without an underlying product is a very serious red flag, because uncapped raises are perceived by the crypto community as greedy and raise investor uncertainty about the valuation of the platform or product being bought. 2017
ICO promoters should not allow tokens to be traded before the underlying protocol network or application is live, and should not use a landing page that focuses almost exclusively on the ICO while providing less content on the product, project, technology, and team. 2017
Through continuous evolution and improvement of ICO practices, the ICO industry and the underlying crypto businesses can become the foundation of the emerging crypto economy. 2017
The challenges created by Legal Tech, the new economy, and platform technologies justify a fundamentally more creative and innovative approach to legal education in the 21st century. 2017
Legal Tech's disruptive innovation combined with the principles of the sharing economy requires lawyers and lawmakers to reevaluate their understanding of many areas of law. 2017
Redesigning legal doctrine around sharing and decentralized peer to peer platforms demands out of the box thinking from a profession whose members were trained, both in law school and across their careers, to think inside the box. 2017
Because a public blockchain is genuinely public and immutable, it increases transparency while simultaneously and significantly reducing transaction costs. 2017
The legal disputes already generated by sharing platforms indicate that future blockchain enabled sharing services will not be accepted quickly or without resistance from incumbents whose service or product delivery is challenged. 2017
Data on the credit derivatives market show that since 2000 private investment funds steadily increased their share of that market while banks' role declined, which supports shifting regulatory emphasis onto banks' lending exposure to those funds. 2017
The industry largely absorbed the increased expenses of the Dodd-Frank Act by increasing the use of pass-through expense terms in adviser and fund arrangements, which is why advisers increasingly attributed earnings effects to opportunity costs rather than to expenses between 2012 and 2015. 2017
The mere threat that hedge funds' Form PF systemic risk filings could become public, or be shared between the SEC and the federal bankruptcy bench, could impose some discipline on distressed debt investors' conduct in the bankruptcy process. 2017
Private investment fund due diligence may follow the same trajectory as banks' risk evaluation, which moved from unstandardized general strategies in the early 2000s to a heavily regulated and scientific practice today. 2017
The obstacles preventing consumers and entrepreneurs from accessing a workable new technology are frequently not technological limits but human choices embodied in law: legal and regulatory rules prohibit or limit commercial exploitation of, and public access to, new technology. 2017
Regulatory caution is not neutral: it functions to reinforce the status quo, with the result that new technologies struggle to reach the market in a timely or efficient manner. 2017
In the Airbnb case, the selection of the relevant facts and the residency rule that followed from it benefit vested interests, most obviously the hotel industry that stands to lose from Airbnb's competition. 2017
The premises on which regulation of a new technology is built may not be facts at all, or at least not the most relevant facts about that innovation, as the assumption that Airbnb hosts are simply chasing easy money illustrates. 2017
In a world where regulatory competition is the new normal, regulators can pay a heavy economic price for being overly cautious or for abandoning the attempt to establish a meaningful basis for regulation, because first mover markets capture the benefits. 2017
Regulatory experimentation matters within a single jurisdiction and not only across jurisdictions, because it gives regulators data on the real world effects of a particular regulatory scheme in a comparable setting. 2017
Blockchain-based smart contracts in digital marketplaces are the technology most likely to extend and lead the decentralization of the relationship between businesses and their counterparties. 2017
The crypto economy can continue to develop without falling back on centralized regulating authorities only if two things exist: a system for evaluating reputation and trust, and a fair dispute resolution system that guarantees certainty of outcomes. 2018
Healthy expertise tags are secure not because attack is impossible but because it is easier to profit from them by improving them than by harming them. 2018
Even a successful takeover yields the attacker only a fraction of one transaction's fee before the expertise tag topples, so as long as any single fee is smaller than the total reputation there is no incentive to game the system for fees. 2018
The platform's feedback loop is closed in the sense that there are no rent seeking owners: the system is entirely supported by its users and the users reap the entire profit. 2018
A healthy expertise tag requires that fees from new commenters buying in remain smaller in the long term than fees from outside business; otherwise the expertise tag is simply a pyramid scheme. 2018
Arbitration on the platform fails at either end of the fee range: if the parties set fees too low the selected arbiter refuses the work and the arbitration fails, and if arbiters demand fees higher than the public will pay they fail to attract cases. 2018
The author contests Houy's claim that killing a proof of stake currency costs nothing: on this platform the token's value is calculably predictable rather than merely a function of public opinion, and signaling an intention to buy tokens usually raises the price rather than triggering a race to the bottom. 2018
The proposed fix is to value tokens by how the post was received and cited: tokens minted at a node with a large branch of positive references are worth more, while tokens from a post whose betting pool was close to 50-50 are worth less in future salaries than tokens from a post with uniform agreement. 2018
Crypto-economic incentive design is only limitedly successful at shaping future human behavior, because the designer must speculate about future human mental states and belief systems that may turn out entirely different from what was anticipated. 2018
Any survey of token models is necessarily incomplete, because the economic experimentation inherent in crypto-economics continuously generates new token models and incentive designs. 2018
Crypto-economics is arguably a misnomer, since it is really just economics; what may legitimate the label is the unprecedented combination of disciplines required to analyze incentive designs in decentralized systems. 2018
Decentralized solutions can challenge the basic assumptions of the theory of the firm, because the role of the firm changes if decentralized technology lowers the cost of using markets exponentially. 2018
DAOs can replace the coordination and monitoring functions supplied by the firm, because they can measure each member's contribution to the finished work product more efficiently and allocate rewards accordingly. 2018
In decentralized systems the functions previously performed by policy designers, central bankers, and economists in centralized markets are taken over by the token designer for the respective token economy. 2018
To avoid a token price crash, escrow accounts holding unissued tokens should carry usage and access controls assuring investors that escrowed tokens will not be issued at a discount, with lockups or phased releases minimizing crash risk. 2018
Commercial benefits attached to a token issuance can offset depreciated supply scarcity, meaning the dilutive effects of a large supply of the token in circulation. 2018
Combining quasi-fiscal policy, increasing benefits attached to tokens, with monetary policy, increasing supply in circulation, may or may not have an effect on the market price of the tokens. 2018
The balance between the commercial benefits and use cases attached to a token and the scarcity of its supply is critical in the issuance of a token offering. 2018
Because tokens move in and out of the top 100 daily, the study limits its time series dataset to all available data on the top 100 cryptocurrencies until April 2018, selecting coins by market capitalization before April 2018. 2018
The tokens in the sample of the top 100 cryptocurrencies were launched between January 2009 and March 2018, with the greatest number of top 100 coins launched in a single month occurring in November 2017. 2018
Permission to use a service via the token took over as the dominant type of underlying value in June 2017, and the author sees multiple indicia that this trend toward tokens granting rights to use services will continue. 2018
Seventy-two of the top 100 tokens cap the number of tokens that will ever be issued, a deflationary model of token issuance. 2018
Under a deflationary token model, prices are expected to increase because of the fundamental scarcity of token supply. 2018
It is unclear whether the cryptocurrency market on its own can over time produce the level of stability and absence of volatility that cryptocurrencies need to become truly mainstream. 2018
The data support the conclusion that interoperability as a means of survivability dictates token design, with a majority of tokens seeking a broader base of users by making the token interoperable. 2018
Tokens experimenting with alternative consensus protocols typically change the transfer process in an effort to become more efficient. 2018
The emergence of inflationary token models and the increasing interoperability of token models are the core developments for the industry visible in the data. 2018
Increased interoperability of tokens optimizes survivability, and the data suggest token designs are increasingly focused on longer term survivability designs. 2018
Existing centralized micro task marketplaces cannot adequately meet the rising demand for high quality labelled AI training data. 2018
Paying proportionally, up to fifteen times, for the same project output is waste, and the necessity of multiplying work also pushes micro task workers into lower rates with no pay increases. 2018
A bank account is a necessary condition for participation in the existing centralized micro task marketplace: without one, a worker can neither contribute nor profit. 2018
Decentralized crypto market solutions can significantly optimize the existing mechanical turk market while simultaneously democratizing access to it. 2018
Because platform access requires only an internet connection rather than a bank account, the decentralized design expands the micro task labor pool by up to 40 percent, including the unbanked. 2018
Reputation scores clear the market on both sides: a low requester score makes workers less likely to accept that requester's offers, and a low worker score reduces the worker's likelihood of retention. 2018
Centralized mechanical turk marketplace leaders operate as rent seeking intermediaries that generate numerous inefficiencies in the market and deprive freelance workers of a share in the profits the platforms capture. 2018
Centralized industry leaders in the freelancer market, including Upwork, Amazon, and Fiverr, charge up to 40 percent in transaction fees. 2018
Removing centralized fees produces a more efficient marketplace for workers, verifiers, and requesters alike by eliminating rent seeking intermediaries, leaving gas for posters as the only cost. 2018
Payment intermediary fees such as Paypal's are viable only for higher volume workers who can eventually avoid them, so they operate as an entry barrier against new micro task workers. 2018
Because holding and storing the platform's tokens requires no banking relationship, internet access is the only requirement for a micro task worker to earn a living on the platform. 2018
Initial Coin Offerings provide unprecedented liquidity and efficiency for capital formation while minimizing transaction cost. 2018
ICOs enable borderless online sales with fewer points of friction, letting promoters bypass typical legal, jurisdictional, and business hurdles by marketing directly to a worldwide investor pool. 2018
Capped ICO raises, adopted to address investor uncertainty about platform valuation in uncapped raises, backfire by creating strong incentives for investors to get in first and thereby raising the likelihood of retail investor frenzy. 2018
ICO promoters can alter the smart contract to change the sales rules mid-course during the ICO. 2018
Because ICOs give investors very limited assurances through upfront and continuous disclosures, the token market is highly volatile. 2018
Switzerland ranks only fourth in the number of ICOs launched yet first in total funds raised, so the average Swiss ICO project raises a greater than average amount of funds. 2018
Switzerland's disproportionate share of ICO funds raised relative to ICO count is attributable to the fact that many of the world's most successful ICOs are launched there. 2018
At the time of publication there were no registered marketplaces or alternative trading systems for cryptocurrency in Canada. 2018
Sweden's Finansinspektionen treats ICOs as investment products that may be traded, and although there is no explicit ban on financial companies raising money through ICOs, no Swedish company had attempted to do so. 2018
Because the new solutions rewarded by the future labor market will be code based, an understanding of code and coding will be essential to participate effectively in the digital world. 2018
DAOs will eventually overtake any organization that lacks their incentives and efficiencies, and because DAOs are cheap and straightforward to clone this will potentially lead to more competition. 2018
Because power exercised over a store of value inevitably produces economies of scale, cryptocurrencies and any other transferable store of value drive networks toward centralization. 2018
Meaningful and secure reputation tokens supply the incentives needed for secure proof of stake consensus in block production, which eliminates the unsustainable inefficiencies of proof of work based blockchains. 2018
In an economic network where real money is at stake, historical good behavior cannot be assumed to prove future good behavior, because sockpuppet accounts allow participants to game the system automatedly, create valuable reputation falsely, and leach value out of the system. 2018
A decentralized network of DAOs is significantly more efficient than a centralized platform because the centralized intermediary fee, twenty five percent in Uber's case, can instead be shared between the driver members and the passengers. 2018
The combined efficiencies of the DAO model suggest that DAO businesses could overcome collective action problems and outcompete existing internet based businesses such as Uber. 2018
The current dominance of altruists in the crypto space will not persist: once the crypto economy matures, an influx of hedgers and rent seekers can be anticipated with certainty, and they will exploit any weakness in the system for profit. 2018
SPoS is far more computationally efficient than proof of work implementations because nodes no longer hash mine; the only computation added beyond the block validity checking every blockchain performs is one validation pool per block, in which each node sends a single up or down vote transaction. 2018
Because each sem token carries a different value depending on the post that minted it and on its position in the reference graph, the total value is difficult to determine, which makes it almost impossible to execute a 51% attack by purchasing tokens on an exchange. 2018
The sem token economy is inflationary at equilibrium, and the authors argue this is a feature: inflation improves security and discourages rent seeking by penalizing holders who do not use their tokens to evaluate posts. 2018
Most current blockchain applications lack complete decentralization: proof of work style validation has produced mining pools because of economies of scale and unbalanced reward structures. 2018
DAOs will replace many organizations that lack their incentive structures and efficiencies, and because DAOs are cheap and straightforward to clone, their proliferation will increase competition while their distributed and anonymous nature prevents natural and political monopolies. 2018
Unlike a conventional corporate loyalty program, company or industry tokens offer liquidity, because platform participants can sell and transfer them on crypto exchanges or secondary markets, which integrates the token and the platform into the mainstream economy. 2018
Decentralized organization has not yet displaced the centralized world: traditional incumbents still enjoy enormous market power, and the success of more decentralized systems still depends on the goodwill of the parties involved. 2018
DAOs can be more productive than hierarchical organizations because their information allocation and feedback effects allow them to distribute the optimal amount of power to the optimal talent at the optimal point in time. 2019
Inexpensive open source smart contracts eliminate a major motivation for creating a firm under Coase's transaction cost theory, because they enable trustworthy transactions of any size with minimal transaction cost and high transaction security. 2019
Hard forks can reintroduce the double spend problem, because wallets, merchants, and users running the previous code deem the new code invalid and cannot detect spending on it, so coins spent in a new block could be spent again on an old block. 2019
Existing ledger structures for securities offerings are defective: because individual firms rely on batch processing, the model generates dependencies, multi-day settlement times, distinctive operational risks, and duplicative costs. 2019
Legal certainty is a necessary condition for the maturation of blockchain securities trading; the technology alone will not carry it there. 2019
The compliance burden attached to operating an alternative trading system, including fees, consumer protection, examination, and books and records requirements, is typically cost prohibitive for startups. 2019
Running an alternative trading system on a blockchain cures the ATS system's traditional price discovery latency, because every trade is posted to a public ledger that everyone can access. 2019
Naked or out of the box short selling is possible only because settlement takes three days, so eliminating the window between trade and settlement on a blockchain eliminates that abuse. 2019
Transfer agents become unnecessary in blockchain based trading models because every function they perform, including maintaining the holding record, can be automated in code and is already produced by the ledger's design. 2019
Instant settlement destroys an existing business practice: without the T+3 grace period, institutional investors can no longer lend idle shares to investors covering short positions. 2019
Neither the Overstock offering nor the Linq based offerings were structured to support widespread ownership or trading through blockchain, and no major exchange or inter-dealer market permits or will foreseeably permit trading of blockchain issued securities. 2019
A blockchain based offering routed through a single broker produces a specific cluster of risks, including limited price discovery, no market making and therefore less liquidity, constrained short selling, impaired best execution, and no print to a tape or national exchange. 2019
Using blockchain as a more efficient public offering medium will almost certainly require modifying the regulations governing the offering process, the processes for offering, settling, and administering securities, and the roles of market participants built up over decades. 2019
Governmental endorsement and guidance on crypto investments is essential for future securities offerings involving cryptocurrencies and blockchain, and absent it the gap between the existing regulatory infrastructure and crypto securities investment will inevitably widen as the market grows. 2019
The Overstock structure fails to deliver investor privacy, because all existing broker-dealer customer agreements contain provisions allowing the broker-dealer to share the customer's identity, whereas ideally the individual's privacy would be contained. 2019
Blockchain technology produces a substantial increase in the efficiency of the agency relationship and lowers agency costs by orders of magnitude. 2019
Smart contracts enabled by blockchain technology allow comprehensive, near error free, and zero transaction and agency cost coordination of agency relationships. 2019
The removal of checks and balances, agent monitoring, audit requirements, disclosure regimes, market pressure, and executive compensation schemes produces a qualitative shift in efficiency in the agency relationship and in corporate governance overall. 2019
The ICO share of total blockchain startup fundraising collapsed from about 80% to roughly 35% by August 2018, recovered only marginally to 40% to 50% through February 2019, and then fell to 20% in March 2019. 2019
ICOs changed the venture funding market because they provide investors liquidity far faster than the traditional venture capital path to a late IPO or acquisition, letting venture funds capitalize on profits early. 2019
During the ICO boom years the venture capital market in the decentralized technology sector ground to a halt, and the later demise of the ICO market reversed the trend back toward venture funding. 2019
Every time decentralization emerges in a given industry, profit margins disappear, as demonstrated by Skype in telecommunications and by Napster and Emule in the music industry. 2019
Decentralization transcends the capitalism versus socialism dichotomy because it uses elements of both profit generation and redistribution, organizing economic structures that generate profits while simultaneously redistributing resources. 2019
Personal data, preferences, and opinions can only be limitedly commercialized inside centralized structures, whereas in decentralized structures the same assets can be tokenized, valued, and mobilized, including in real time. 2019
Decentralized technologies increase consumer and market trust at unprecedented scale, which lowers transaction costs and raises confidence and certainty, thereby facilitating economies of scale that centralized structures may not be able to achieve. 2019
Because decentralized cryptocurrency platforms have lower cost structures, they can remove the consumer fees integral to centralized competitors, which eradicates downward pressure on platform worker compensation and creates a more efficient marketplace by removing rent seeking intermediaries. 2019
Growth in stable cryptocurrencies traces back to attempts to combine the benefits of cryptocurrencies and blockchain with remedies for market volatility, and the growth data suggests demand for volatility management products will keep increasing. 2019
Because cryptocurrencies embody a transferable store of value, the exercise of power over that value inevitably leads back to centralization through economies of scale, creating core points of attack that undermine the very nature of decentralization. 2019
Because of their disciplining and market stability enhancing effects, stable cryptocurrencies form the backbone of the financial technology infrastructure required for any distributed app economy and decentralized commerce to emerge. 2019
Smart contracts enable anonymous parties to engage in decentralized commerce because automated contracting self-executes and self-regulates according to mathematical strictures, removing the need for agency and intermediaries almost entirely. 2019
For any static set of rules in an infinitely repeated game using reputation stakes there is a way to subvert the rules for individual profit at the expense of the group, a result the author attributes to the Folk Theorems of game theory. 2019
A market leader's lack of investment in disruptive technologies often causes abrupt loss of market dominance and even total replacement, because market leaders shortsightedly refuse to cannibalize their own dominance through disruptive technologies. 2019
Intermediary fees in centralized fiat payment systems make those systems economically viable only at higher transaction volumes, which creates barriers to entry that decentralized payment systems do not impose. 2019
Tether, like every other stable cryptocurrency project, remains afflicted with significant design challenges, even though its market capitalization and stability around one dollar give some support for stable cryptocurrencies' capacity to create market stability. 2019
Because cryptocurrencies embody a transferable store of value, the exercise of power over that value inevitably leads to centralization through economies of scale, which creates core points of attack and undermines the very nature of decentralization. 2019
Historical evidence demonstrates that every time decentralization emerges in a given industry, profit margins disappear. 2019
For any static set of rules in an infinitely repeated game using reputation stakes, there is a way to subvert the rules for an individual's profit at the expense of the group, which is why static decentralized governance rules can always be gamed and only dynamic, changing rules can address the problem. 2019
Narrowly construed, a digital asset is instantiated through computer code and depends on consensus computer algorithms to trigger and validate any transaction in that asset; broadly construed, digital assets extend to items such as video game goods that have no validating consensus algorithm and no comparable security. 2019
Smart contracts benefit business by simplifying and automating transactions, removing transaction costs, and creating certainty for counterparties, and they are inexpensive to run on a blockchain. 2019
Automation in smart contracting reduces negotiation between counterparties to near minimal levels and removes almost all of the transaction costs typically associated with contracting. 2019
The inherent mathematical logic of computerized code in smart contracts can clarify the parties' intent optimally, which increases certainty, creates efficiency, and thereby incentivizes commerce. 2019
Because cryptocurrencies, like any currency or store of value, entail transferable value, the exercise of power over that value inevitably leads to centralization through economies of scale. 2019
Insurance underwriting as currently organized imposes significant costs and inefficiencies and erects high barriers to entry, and it provides no democratized access to the underwriting process or collective decision making on risk. 2019
Insurance premia are treated as revenue of the entire DAO rather than of the underwriters who wrote the policy, and are shared among DAO participants; consequently the value of a token is a function of the DAO's expected future cash flows. 2019
A breach occurs only when the underwriters concerned believe that the value of their encumbered tokens is less than the payment they would have to make in order to reclaim those tokens. 2019
The value of a token is not uniform across tokens: it depends on whether the token is currently encumbered and, for encumbered tokens, the sooner the token is expected to be released from encumbrance the greater its value. 2019
The DAO design requires that the value of the tokens staked on a set of policies be large enough to cover the maximum possible liability on those policies, which in turn imposes a minimum condition on the premium charged. 2019
Because the total supply of tokens grows at a constant rate each period, the value of individual tokens depreciates over time. 2019
The DAO is insolvent when the present value of expected cash flows from new policies falls below the expected cash outflow on currently outstanding policies, and in that state the value of a token is negative. 2019
How much capital an underwriter holds is ultimately a matter of personal risk preference, and an underwriter willing to tolerate fluctuations in token holdings need provide only for expected losses. 2019
From the viewpoint of consumers and regulators, encumbered tokens, whose value derives from the DAO's future cash flows, serve as a substitute for regulatory capital. 2019
The proposed DAO design is likely to lower barriers to entry in insurance, since non traditional firms and even individual investors can buy tokens at auction and then either underwrite with them or hold them passively. 2019
Hedge fund managers adopt emerging technology because it converts into a fee premium: technology driven outperformance makes them more competitive than other funds and financial institutions, which in turn lets them charge higher fees. 2019
Easier access to trading data and to information about the hedge fund industry has been a significant factor in the growth of hedge fund assets, because analytic platforms let managers manipulate peer and style data and build targeted marketing materials. 2019
In the Numerai model, using artificial intelligence to synthesize competing data scientist models into a meta model raises efficiency and improves capital allocation by reducing overhead costs. 2019
The 2018 ICO boom exposed a core limitation of blockchain technology: ICOs sold investors decentralized infrastructure products on the assumption that a baseline infrastructure already existed, and that assumption proved false. 2019
Blockchain-enabled sharing services are unlikely to be accepted quickly or without resistance, because incumbents challenged by new ways of delivering a service or product will resist, as the existing legal disputes over sharing platforms demonstrate. 2019
Legacy systems at private investment funds and banks are more expensive, more error prone, and slower than emerging blockchain technologies, a gap illustrated by the $1.7 trillion in processing fees banks charged in 2014. 2019
Because blockchain is transparent, verifiable, self-authenticating and self-enforcing, transactions can settle instantaneously at near zero cost, and it is this combination plus technology-driven democratized trust that drove the financial industry's large blockchain investments out of fear of obsolescence. 2019
Machine learning applied to execution algorithms lets large orders be split into thousands of smaller transactions without moving the market, with the algorithm adjusting its aggressiveness to market conditions. 2019
ICO funding collapsed as a share of blockchain startup fundraising, falling from 80% to around 35% by August 2018, recovering only marginally to 40% to 50% between September 2018 and February 2019, and dropping to 20% in March 2019. 2019
Hedge fund secrecy is not incidental but competitively necessary: the less the market knows about a fund's activities, the easier it is for the fund to compete and generate the returns clients demand. 2019
Hedge fund disclosure to counterparties and investors relies on balance sheet concepts that are uninformative about the actual nature of market risk and credit risk exposures. 2019
Banks continue to find hedge fund business desirable because hedge funds take risks other participants will not, borrow heavily and pay a premium for borrowing, which sustains the lending relationship despite its dangers. 2019
A single global financial regulator is not a serious policy option because national political interests are incoherent and cannot readily be united to establish such a body. 2019
Coordinated international cooperation in hedge fund regulation will ultimately be hindered by administrative costs, immense transaction costs, setup costs and, above all, the divergent interests of offshore havens and the resulting jurisdictional arbitrage, so it may never become a realistic regulatory option. 2019
If coordinated international regulation forces hedge funds out, the funds can absorb the costs of relocating offshore while the market segments and jurisdictions they leave will inevitably suffer. 2019
Competition among creditor banks undermines indirect regulation, because competing banks compromise on important elements of the risk management process and agree to overly generous credit conditions. 2019
Market discipline, internal ratings and supervisory review under the Basel Framework change bank lending practice and disclosure, which in turn lowers hedge fund leverage and mitigates moral hazard of the kind seen at LTCM. 2019
The unfettered discretion of fiat monetary policy makers can lead to arbitrary outcomes, because the overall value and stability of any fiat currency is contingent on the fluctuations and successes of a country's economy rather than on any fixed valuation basis. 2019
Monetary policy making for fiat currencies largely lacks transparency, and that opacity prevents markets from taking anticipatory action on policy indicators. 2019
Tether's growth in market capitalization, its stability around one dollar, and investors' use of it as a temporary safe haven provide some empirical support for the proposition that stable cryptocurrencies can create market stability. 2019
A well established stable cryptocurrency and a universal exchange form a positive feedback loop: the exchange's liquidity is enhanced by the stable cryptocurrency, and the stable currency's stability and adoption are enhanced by the exchange. 2019
Stability drives a causal chain in commerce: the more stable a cryptocurrency, the more it proliferates, and the more stable cryptocurrencies proliferate in commerce, the less able corruption is to destroy economic growth, making the degree of currency stability negatively correlated with corruption. 2019
The cryptocurrency market structure is fundamentally convoluted because each project requires its own volatile token, which is equivalent to forcing grocery shoppers to buy a different currency for every store and every product. 2019
Leverage offered by cryptocurrency exchanges worsens rather than cures the market's illiquidity, because borrowed money rather than genuine demand is driving the price. 2019
Central bank price stability is elusive for two structural reasons: central banks are constantly lobbied to move money supply away from equilibrium, and even absent lobbying they face information asymmetries that prevent them from determining the optimal supply at any given moment. 2019
The interoperability deficit in cryptocurrency markets is partly intrinsic to blockchain technology itself, because the consensus mechanism that allows block propagation on one chain in some ways negates interoperability with other chains and their consensus. 2019
The lack of interoperability is a very serious threat to the survivability of cryptocurrency projects, as the crypto winter of 2018 and 2019 demonstrated when thousands of competing, non interoperable projects failed. 2019
Currency stability should be used as the consumer facing proxy for interoperability, because teaching the public to value stability is easier than educating it about the blockchain technology that produces technical interoperability. 2019
A decentralized crypto economy requires a stable coin because no rational party will risk wealth on a long term contract denominated in a volatile currency: neither renter nor landlord will sign a lease whose rent may halve or double in any given week. 2019
Mass adoption fails at the user level: the average user will not identify, research, and purchase diverse sets of tokens even where those tokens would create value, because the existing cryptocurrency market structure is simply too cumbersome. 2019
Non speculator lay people will not use cryptocurrencies for daily consumption, groceries, or banking transactions unless the value of the currency is stable; stability is a precondition of ordinary consumer use, not merely a convenience. 2019
The authors adopt Schilling and Uhlig's result that official money and cryptocurrencies can co-exist in a manner consistent with stability, rejecting the framing that private currency and central bank money are necessarily mutually exclusive. 2019
A currency that does not hold a stable store of value forces continual recalculation and renegotiation of contracts, so any future decentralized economy will require stable cryptocurrencies. 2019
Under the quantity theory of money, minting twice as much currency halves its price and burning half of the existing currency doubles it, which is the mechanism by which a supply rule can theoretically stabilize price. 2019
The Folk Theorems of game theory imply that no matter how complicated a stable coin protocol becomes, a powerful and patient player has strategies to subvert the system and profit at the expense of the group. 2019
Stable cryptocurrency bonds should be minted with a fixed expiration, following the practice of historical central banks, because fixed expiration makes price discovery more efficient. 2019
Because most of the value of contemporary cryptocurrencies comes from speculation on future uses that do not yet exist, the vast majority of cryptocurrency is technically hot money, and reserves are the best defense against the resulting price fluctuations. 2019
Determining what fraction of a currency is hot money is necessary for efficient defense of its stability, because the reserve requirement follows from that ratio rather than from a blanket full-backing rule. 2019
Misestimating the hot money ratio fails in both directions: overestimation makes the currency more costly to use, and underestimation leaves it insecure, so efficiency and security are in direct tension. 2019
Defining the energy of money as the product of economic momentum and velocity gives a basis for discussing economic frictions and for distinguishing genuine from artificial network energy, which is what guards against hot money instability. 2019
Holding taxes are the implicit result of inflation borne by coin holders, and they should be set to account for the inefficiencies of the economy rather than the inefficiencies of maintaining the currency. 2019