Co-Creation and Implementation of Cryptocurrency in Blockchain Solution
COM2 Level 4
Executive Classroom, COM2-04-02
Abstract:
The emergence of blockchain technology has revolutionized peer-to-peer (p2p) transactions. Moreover, it has renewed the interests of firms to collaborate with open-source community to advance blockchain technology. But, the firms are often in a quandary on whether to join an open-source community that has already developed a few versions of the software. This what the first essay sets to explore: the timing of participation of volunteers and firms. While blockchain technology has enabled p2p transactions, the volatility of its native token has stalled the mass adoption of the cryptocurrency. The second essay explores this problem by modeling cryptocurrency as a medium of exchange.
The first essay titled "Analytical Modeling of Open-Source Blockchain Development" investigates how different times of participation of the firm and volunteers in an open-source blockchain development affect the development of open-source. We present a multiperiod dynamic model that helps us explore four scenarios of participant entry. Analyses of the model yield that under the cocreation scenario, in which the firms and efficient and inefficient volunteers participate since the inception, the volunteers contribute the most compared to other scenarios. Moreover, we find that the maximum aggregate code is contributed in a scenario where the firm is a late entrant to the open-source development scene.
The second essay titled "Cryptocurrency Blockchain as a Payment System and Implications for Fiat-Exchange Rate stability" focuses on cryptocurrency in blockchain. It models the exchange of cryptocurrency between miners and users for the transaction processing services provided. The model presents a relationship between consumption behavior of users and network behavior that can be explored to achieve price stability. We extend the model further to see how changing the balance of bargaining power impacts the consumption of blockspace and transaction fee. Lastly, we modify the model to investigate how consumption will vary under different consensus protocols.
Overall, the thesis proposal looks at two important aspects of a blockchain: its creation through open-source blockchain development and its implementation through development and enforcement of exchange rate stabilizing monetary policy.