Academic Papers

Blockchain Governance in the Wild (2024)

Cryptoeconomic Systems, v.3(1), May 1, 2024co-authored with Kevin Werbach, Primavera De Filippi, and Josh Tan

A key function of blockchains and decentralized applications (dApps) built upon them is to reach consensus with minimal centralization or hierarchy across many independent, economically-motivated actors: governance is the collection of procedures, rules, and norms that allow these actors to make and implement such decisions. We survey 23 blockchain projects, both Layer 1 and dApps, to ascertain their current implementations and future plans of governance. We do not examine only the governance decisions encoded on-chain: our work expands to consider social norms, informal practices, and institutional governing entities associated with the project outside of the code. We find that for-profit corporations are the most common legal structure, with foundations second. Financial incentives dominate as the incentive mechanism in blockchain governance. However, this survey also illustrate  a variety of responses among different communities, even on seemingly foundational matters such as what makes a decision legitimate. 

Designing Effective Assessments in Economics Courses: Guiding Principles (2023)

The Journal of Economic Education, 55:1, 63-76, October 14, 2023

Assessments play a vital role in the success of a course: they provide valuable feedback regarding knowledge gaps, encourage deeper understanding of the material, and develop critical thinking. Used incorrectly, assessments likely achieve none of these. To avoid the latter outcome, this article helps new instructors by (1) summarizing current theory of sound assessment design, (2) applying it to assessment design in economics courses, and (3) assembling examples of assessments from the economics literature for instructors who may wish to experiment with different assignments. 

Taxing Blockchain Forks (2020)

Stanford Journal of Law and Blockchain Economics, June 27, 2020 co-authored with Mattia Landoni 

The tax treatment of cryptocurrency forks presents four unique challenges: (1) parent/child designation, (2) new token access, (3) assessment of fair market value, and (4) assessment of comparable contemporaneous fair market values. We provide evidence that each issue complicates the determination of income realization, or basis apportionment. We compare three existing approaches for assets acquired without a purchase. We conclude that the least problematic approach (adopted by Japan) assigns zero tax basis to the new coin and taxes the proceeds upon sale. Treating the new coins as realized income (as recently ruled in the US) is the most problematic approach.

Bitcoin Reveals Exchange Rate Manipulation and Capital Controls (2018)

SSRN (newest version); FRB-D Globalization Institute Working Paper 2016-292

Many countries manipulate the value of their currency or use some form of capital control, yet the data usually used to detect these manipulations are low frequency, expensive, lagged, and potentially mis-measured. I demonstrate that the price data of the internationally traded cryptocurrency Bitcoin can approximate unofficial exchange rates which, in turn, can be used to detect both the existence and the magnitude of the distortion caused by capital controls and exchange rate manipulations. However, I document that bitcoin exchange rates contain problematic bitcoin-market-specific elements  and must be adjusted before being used for this purpose. As bitcoin exchange rates exist at a daily frequency, they reveal transitory interventions that would otherwise go undetected. This result also serves as verification that Bitcoin is used to circumvent capital controls and manipulated exchange rates. ​

Financial Regulations and Price Inconsistencies across Bitcoin Markets ( 2017)

Information Economics and Policy, June 2017, v.39(C)(Free) Working Paper: SSRN or FRB-D Globalization Institute Working Paper 2016-293co-authored with Sofia Vivanco

We document systematic differences in bitcoin prices across 11 different markets (cryptocurrency exchanges) representing 26% of global bitcoin trade volume. These differences must --- due to the identical nature of all bitcoin--- result from characteristics of markets themselves. We examine differences across the markets and find that those which do not require customer identification for establishing an account are more likely to deviate from representative market prices than those which do. This implies that standard financial regulations, specifically know-your-customer regulations, can have a non-negligible impact on the bitcoin market. 

Reports & Policy Papers

2nd & 3rd Global Cryptoasset Benchmarking Studies (2019, 2020) 

Published by the Cambridge Centre for Alternative Finance3rd Edition: September 2020co-authored with A. Blandin, Y. Wu, T. Eisermann, A. Dek, S. Taylor, and Damaris Njoki. 2nd Edition: January 2019co-authored with Michel Rauchs, Appoline Blandine, Kristina Klein, Martino Recanatini, and Bryan Zheng Zhang

This report is constructed from surveys incorporating answers from 280 companies in 59 countries - approximately 75% of firms in the cryptoasset industry - covering four main market segments: exchanges, miners, wallets, and hardware producers.  

Distributed Ledger Technology Systems: A Conceptual Framework (2018) 

Published by the Cambridge Centre for Alternative FinanceDecember 2018: co-authored with Michel Rauchs, Andrew Glidden, Brian Gordon, Martino Recanatini, François Rostand, Kathryn Vagneur, and Bryan Zheng Zhang 

This report is an interdisciplinary, academic-industry partnership to create a unified language and analytic framework that both researchers, developers, and policy-makers can use to allow analyze, model, discuss, and regulate DLT's (and blockchains). ​ 

Blockchain Technology Disrupting Traditional Records Systems (2017

This was originally published in the now defunct "Financial Insights" newsletter from the Dallas Fed. A version of the paper is kept on SSRN.  co-authored with Christoffer Koch 

The article gives a very general introduction to the technology, promises and limitations of blockchain technology --- popularized by the digital currency Bitcoin and a key force behind the surge of cryptocurrencies. Blockchain acts as a distributed database or joint global register of all transactions --- a decentralized digital ledger --- and has the potential to become a disruptive force in the financial industry and elsewhere, bypassing traditional, centralized channels such as banks. 

The Potential Impact of Decentralized Virtual Currency on Monetary Policy (2017)

published by the Federal Reserve Bank of Dallas Globalization and Monetary Policy Institute

2016 Annual Research Report

The border-free nature of decentralized, virtual currencies --- Bitcoin is only one example --- presents an interesting challenge for monetary policy which assumes some amount of government control over cross-border financial flows and exchange rates. At the extreme, decentralized virtual currencies systems may force all countries to accept floating exchange rates and unrestricted financial flows.

Opinion Pieces