Impacts of Economic Policies on Wealth Distribution in Token Economies

TL;DR

This paper investigates how economic policies influence wealth distribution in Bitcoin, using time series analysis and causality tests to understand policy impacts and propose a taxonomy for economic policies in token economies.

Contribution

It introduces a novel framework for analyzing policy impacts on wealth distribution in token economies and proposes a taxonomy based on existing Bitcoin Improvement Proposals (BIPs).

Findings

Causality links between BIPs and wealth distribution identified.

A structured taxonomy for economic policies in token economies proposed.

Methodology for analyzing policy impacts in digital currencies developed.

Abstract

In this paper, we analyse the impacts of exogenous and endogenous factors on wealth distribution in the Bitcoin token economy, where wealth distribution refers to the distribution of BTC between economic participants or groups of economic participants. The objective of the paper is to analyse the impact of economic policies on wealth distribution in the Bitcoin ecosystem. Different macroeconomic and microeconomic time series are used to eliminate noise in the wealth distribution time series, and the causality analysis is performed between Bitcoin Improvement Proposals (i.e., BIPs) and the cleaned wealth distribution data to reveal possible patterns in the impacts that the endogenous policies have on wealth distribution in token economies. Lastly, a structure for economic policy taxonomy in token economies is proposed where different the policy implementations are illustrated by existing BIPs. This approach highlights the actions available to the policy makers, as well as providing a technique for analysis of policy impacts in token economies and their categorization.