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Bitcoin-Mining and Its Economic Costs

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  • Marcel Thum

Abstract

The public debate over Bitcoins is currently focused on the lack of state control over the currency and the dangers of a speculative bubble. In the euphoria over the new form of digital currency, it is often overlooked that, unlike traditional money, Bitcoins and other crypto-currencies often have high production costs. The production of Bitcoins has cost more than 5 billion US dollars since 2010.

Suggested Citation

  • Marcel Thum, 2018. "Bitcoin-Mining and Its Economic Costs," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 71(02), pages 18-20, February.
    • Handle: RePEc:ces:ifosdt:v:71:y:2018:i:02:p:18-20
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    References listed on IDEAS

    as
    1. David Yermack, 2013. "Is Bitcoin a Real Currency? An economic appraisal," NBER Working Papers 19747, National Bureau of Economic Research, Inc.
    2. Carl-Ludwig Thiele & Martin Diehl & Thomas Mayer & Dirk Elsner & Gerrit Pecksen & Volker Brühl & Jochen Michaelis, 2017. "Cryptocurrency Bitcoin: Competing Currency or Object of Speculation: What Are the Implications for the Current Monetary System?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 70(22), pages 03-20, November.
    3. Nitzan, Shmuel, 1994. "Modelling rent-seeking contests," European Journal of Political Economy, Elsevier, vol. 10(1), pages 41-60, May.
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    Cited by:

    1. Thomas Mayer & Julian Grigo & Patrick Hansen & Lars Hornuf & Burkhard Balz & Jan Paulick & Markus Demary & Vera Demary & Stefan Eichler & Marcel Thum & Gilbert Fridgen & Benedict Drasch, 2019. "Parallelwährungen jenseits der Finanzaufsicht: Haben Bitcoin und Libra eine Zukunft?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 72(17), pages 03-28, September.

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    More about this item

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates

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