Bitcoin's limited adoption problem

• 成果类型: Article
• 署名作者: Hinzen, Franz J.; John, Kose; Saleh, Fahad
• 署名单位: New York University; Wake Forest University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2022.01.003
• 发表日期: 2022
• 页码: 347-369
• 关键词: Bitcoin; Limited adoption; consensus; Network delay; Blockchain; FinTech

摘要

We demonstrate theoretically that Bitcoin's limited adoption arises as an equilibrium out -come rather than as a short-lived property. Our results are driven by negative network effects which arise due to Bitcoin's need for consensus and the existence of network de-lay. As the Bitcoin network expands, network delay grows thereby prolonging the time needed for generating consensus. In turn, transaction settlement becomes prolonged, and users abandon the system, yielding limited adoption. Increasing transaction rates fails to solve this problem because increasing transaction rates increases fork probabilities which prolongs the consensus process and generates limited adoption. (c) 2022 Elsevier B.V. All rights reserved.