IDEAS home Printed from https://ideas.repec.org/a/wly/iecrev/v67y2026i2p499-512.html

Cryptocurrency Bubbles and Costly Mining

Author

Listed:
  • Kohei Iwasaki

Abstract

This paper develops a model of a cryptocurrency by incorporating mining into the otherwise standard search‐theoretic monetary framework. As usual, multiple equilibria exist. To obtain a sharp prediction on whether a cryptocurrency' s value will last in the future, I propose a notion of equilibrium refinement based on the feature that mining uses real resources. This refinement eliminates all equilibria where the value of the cryptocurrency is zero at some point in time or converges to zero over time. This result suggests that agents can collectively sustain the value of the cryptocurrency using costly mining as a coordinating device.

Suggested Citation

  • Kohei Iwasaki, 2026. "Cryptocurrency Bubbles and Costly Mining," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 67(2), pages 499-512, May.
    • Handle: RePEc:wly:iecrev:v:67:y:2026:i:2:p:499-512
    DOI: 10.1111/iere.70031
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/iere.70031
    Download Restriction: no
    File URL: https://libkey.io/10.1111/iere.70031?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:iecrev:v:67:y:2026:i:2:p:499-512. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/deupaus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.