Evolution of Shares in a Proof-of-Stake Cryptocurrency-Reference-Cited by-同舟云学术

Evolution of Shares in a Proof-of-Stake Cryptocurrency

Published:2021-02 Issue:2 Volume:67 Page:661-672
ISSN:0025-1909
Container-title:Management Science
language:en
Short-container-title:Management Science

Author:

Roşu Ioanid¹,Saleh Fahad²^ORCID

Affiliation:

1. Finance Department, HEC Paris, 78351 Jouy-en-Josas, France;

2. School of Business, Wake Forest University, Winston-Salem, North Carolina 27109

Abstract

Do the rich always get richer by investing in a cryptocurrency for which new coins are issued according to a proof-of-stake (PoS) protocol? We answer this question in the negative: Without trading, the investor shares in the cryptocurrency are martingales that converge to a well-defined limiting distribution and, hence, are stable in the long run. This result is robust to allowing trading when investors are risk neutral. Then, investors have no incentive to accumulate coins and gamble on the PoS protocol but weakly prefer not to trade. This paper was accepted by Kay Giesecke, finance.

Publisher

Institute for Operations Research and the Management Sciences (INFORMS)

Subject

Management Science and Operations Research,Strategy and Management

Reference5 articles.

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3. A survey of random processes with reinforcement

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