The Principle and Economic Analysis of Bitcoin

• Název práce v češtině: Ekonomická analýza Bitcoinu
• Název v anglickém jazyce: The Principle and Economic Analysis of Bitcoin
• Klíčová slova: Bitcoin, kryptoměny, kryptoaktiva, DLT technologie
• Klíčová slova anglicky: Bitcoin, crypto currencies, crypto assets, DLT technology
• Akademický rok vypsání: 2019/2020
• Typ práce: diplomová práce
• Jazyk práce: angličtina
• Ústav: Institut ekonomických studií (23-IES)
• Vedoucí / školitel: doc. Mgr. Tomáš Holub, Ph.D.
• Řešitel: skrytý - zadáno vedoucím/školitelem
• Datum přihlášení: 31.08.2020
• Datum zadání: 31.08.2020
• Datum a čas obhajoby: 16.06.2021 09:00
• Místo konání obhajoby: Výuka probíhá online, JONLINE, Pomocná místnost pro rozvrhování výuky probíhají online
• Datum odevzdání elektronické podoby: 30.04.2021
• Datum proběhlé obhajoby: 16.06.2021
• Oponenti: PhDr. František Čech, Ph.D.

Seznam odborné literatury

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6.Hayek, F. A. (1976/1990), Denationalisation of Money - The Argument Refined. Institute of Economic Affairs , Hobart Paper Special (3rd edn),pp:70.
7.Houy, N. (2014), The economics of Bitcoin transaction fees. GATE WP 1407, Groupe d’Analyse et de Théorie Economique, Lyon.
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21.White, L. (1999), Hayek's Monetary Theory and Policy: A Critical Reconstruction. Journal of Money, Credit and Banking, 31(1), pp: 109-120.
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23.Wu Jing. (2015), Research on the price formation mechanism of virtual currency in the context of Internet economy[D]. Ocean University of China.
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Předběžná náplň práce

With the continuous development of Internet technology, the Internet economy began to emerge, and a large number of Internet financial products and their derivatives began to appear in the public eye. While capital began to seek investment opportunities, more and more people began to seek information and transparency in transactions. Libertarians' concern about government power and the emergence of traditional banking crisis made investors believe that the government controlled the number of money issued through administrative means to create a certain amount of inflation to squeeze people's wealth, and investors could not grasp the information about the overall macro transaction volume well and were prone to the problem of information asymmetry. In his 1970s monograph The Denationalization of Money, the Nobel Prize-winning economist Hayek made a radical proposal - to abolish the central banking system, issue money privately and compete freely to produce a better type of money, rather than retaining the state's "monopoly" on money. It was the combination of monetary and economic theory and information technology that led to the creation of Bitcoin on November 1, 2008, as a "currency" that was not regulated by central banks or any financial institutions, and experienced its first frenzy upon emergence, with a wave of digital currencies sweeping the world.
Digital currencies① are divided into two main categories according to their definitions One is "stablecoins" - whose underlying asset is not just gold, but also something else (e.g. an official currency or its basket ),while the other is cryptocurrencies, - such as Bitcoin, Litby and other cryptographically implemented using asymmetric cryptographic algorithms network currencies. By far, Bitcoin is the most representative and globally recognized cryptocurrency. By its very nature, Bitcoin is a bunch of complex algorithms with special solutions. Initially, Bitcoin was only spread among geeks who were proficient in network cryptography, and after a period of time, its mechanism gradually became sound, and the venues providing trading services started to appear. First appearing in the media in 2011, the price of Bitcoin has seen explosive growth, with the total market cap peaking at $10 billion.After a brief rise, the price quickly fell back to a low point. In early 2013, the outbreak of the European debt crisis began to worry investors, and Cyprus announced that it was freezing people's bank deposits. The decline in confidence in fiat currency caused a new round of rapid rise in bitcoin, peaking at $266 on April 10, but then quickly falling to $100. In October 2013, however, it climbed rapidly again On December 5, 2013, the People's Bank of China and other ministries jointly issued a "Notice on Preventing Bitcoin Risks On December 5, 2013, defining Bitcoin as an "illegal currency", and more and more national regulators began to block it.
①Bitcoin is categorized in foreign literature as Cryptocurrency, a term synthesized from the cryptographic Crypto and currency Currency, including gold currency (Digital gold currency) and cryptocurrency (Cryptocurrency). This paper refers to cryptocurrency specifically as Bitcoin-like cryptocurrency.
It's undeniable that investors' enthusiasm for this new currency has not waned. Behind the huge price fluctuations is a huge investment opportunity and speculative demand, and due to Bitcoin's secure encryption and high level of privacy,more and more investors are looking to trade Bitcoin, and in 2014 "Bit China" became the world's number one Bitcoin trading platform. As with other online investment vehicles, in March 2014, hackers attacked MT.GOX's back office and looted $467 million worth of bitcoin, causing the platform to file for bankruptcy protection. Bitcoin, a new product of history, still has many problems, but it is beginning to provoke thoughts about the evolution and development of the monetary form. "Money is not a product of the state," wrote Menger(1892), the founder of the Austrian school, "it is not a product of legal provisions, and its existence does not even require the approval of political authorities. In his work, Mises wrote that in the course of its development, money has been challenged by other commodities all the time. From the beginning of primitive society, when people bartered for goods, to the emergence of precious metals, to the current paper money and electronic money, people not only consume goods, but also trade with money. In his book The Denationalization of Money, Hayek supports the idea of private creation of money, and this idea of liberalization provides the theoretical support for the emergence of Bitcoin.
Currently, Bitcoin is attracting the attention of investors, cyber hackers, programmers and governments alike. As investors are paying more attention to the price of bitcoin, focusing on studying its price fluctuations and its intrinsic value, some financial institutions are starting to develop derivatives of bitcoin to hedge against its huge price fluctuations. And as programmers and hackers active on the web, they are starting to teach each other about information security. The government, as the regulator, has to prevent bitcoin from becoming a place of lawlessness and a tool for criminals to launder money, and study whether it will have an impact on the existing economic structure in a controlled manner. From the perspective of academic research, how to explain the formation and influence of prices from economic theory, how to regulate and how to treat this new medium of exchange is very important for the improvement and development of the entire financial system. The scale of Bitcoin trading is currently dwarfed by the macro economy, but if the price breaks down it will inevitably cause concern among global investors. In addition, cryptocurrencies such as Bitcoin, although not perfect, are useful for future monetary development. In this thesis, we analyze the price formation mechanism of Bitcoin precisely by the principles of basic economics, focusing on the influence of transactional demand, speculative demand and government policies on the price of Bitcoin, and reacting to the correlation between the former three and the price of Bitcoin by the trend of macroeconomic data.

Předběžná náplň práce v anglickém jazyce

The use of Bitcoin as a new payment method will not only enrich the current payment methods, but also provide a tradable platform for global trade, which not only enriches the financial product market, but also is a great progress for human society. In today's society, with the gradual deepening of global trade, traditional cross-border payment means cannot meet the increasingly large transaction scale, especially in terms of price. Banks not only charge up to 2.5% for B2B transactions and up to 5% for C2C transactions based on the transaction amount and destination, etc., but will also charge payment fees and may pass these fees on to customers(lianlianpay official website), while bitcoin as the representative of the emergence of digital currency has provided a new and more efficient and convenient option for all kinds of cross-border transactions. In less than a decade since its inception, Bitcoin's price has fluctuated dramatically, making it difficult for investors to "navigate", and due to the lack of a sound theoretical framework, Bitcoin has not yet become a good investment tool. Most of the research on bitcoin has been influenced by government policies and has focused on the legal regulation, concepts and technical principles of bitcoin, but there is a lack of quantitative analysis of bitcoin prices. The link between the virtual economy represented by Bitcoin and the real economy has not yet been established, and the literature on the impact on the capital market and the real economy is scarce. In this thesis, we analyze the formation and influencing factors of bitcoin price, and provide reasonable suggestions to investors based on the domestic and international literature, and provide ideas for domestic financial institutions to develop derivative products of bitcoin.
Bitcoin was first talked about in a cryptography group and gradually attracted the attention of the elite outside of cryptography, including economics, programming and math enthusiasts, and eventually gained widespread worldwide attention through media ferment along with the big ups and downs of the bitcoin price. Of course many economists scoffed at Bitcoin and were unimpressed, believing it could not succeed. Robert Shiller spoke at the World Economic Forum in Davos, Switzerland in 2014, where he specifically sang the praises of Bitcoin, declaring it a bubble. Paul Krugman, the proverbial "Keynesian economist," said the currency was designed with a libertarian bent to undermine the authority of the established financial system established by governments.But Bitcoin as an experiment of monetary freedom , due to its decentralized idea and constant total amount, provides a lot of reference meaning to the reality of traditional fiat money, and it is possible to transform traditional fiat money with the framework of Bitcoin, naturally there are a lot of meaning that we should study and explore, and also more people can really recognize the emerging thing of Bitcoin.