Darwin Among the Cryptocurrencies
Bernhard K. Meister, Henry C.W. Price
TL;DR
This paper explores the evolution of cryptocurrencies through the lens of biological evolution, using toy models and stylized facts to understand survival dynamics and market behaviors.
Contribution
It introduces an evolutionary finance perspective to analyze cryptocurrency development, employing stylized facts and scaling laws to model market phenomena.
Findings
Cryptocurrencies exhibit scaling laws similar to biological ecosystems.
Toy models can replicate stylized facts of ownership, trading volume, and market capitalization.
Evolutionary concepts help explain the survival and adaptation of cryptocurrencies.
Abstract
The paper highlights some commonalities between the development of cryptocurrencies and the evolution of ecosystems. Concepts from evolutionary finance embedded in toy models consistent with stylized facts are employed to understand what survival of the fittest means in cryptofinance. Stylized facts for ownership, trading volume and market capitalization of cryptocurrencies are selectively presented in terms of scaling laws.
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Taxonomy
TopicsComplex Systems and Time Series Analysis · Economic theories and models