Munich Personal RePEc Archive

Cryptocurrency and Double Spending History: Transactions with Zero Confirmation

Kang, Kee-Youn (2019): Cryptocurrency and Double Spending History: Transactions with Zero Confirmation.

WarningThere is a more recent version of this item available.
[img]
Preview
PDF
MPRA_paper_96968.pdf

Download (541kB) | Preview

Abstract

We develop a general equilibrium model of cryptocurrency to study a double spending prevention mechanism without payment confirmations. Agents trade cryptocurrency using a digital wallet, and the cryptocurrency system provides a means to verify a wallet's double spending history. Double spending can be prevented without payment confirmations under some conditions if a wallet has a good reputation for transaction history. As the difficulty of mining work increases, incentives for double spending decrease. We provide new insights into the properties of Bitcoin transaction fees, quantitatively assess the current Bitcoin system, and evaluate the welfare gain from fast transactions without payment confirmations.

Available Versions of this Item

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.