Price formation in the cryptocurrency market. A hypotheses driven econometric analysis of cryptocurrency price determinants

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Chapter 3 Literature Review:
3.1 The four fields of research:
Cryptocurrencies are a cross-disciplinary phenomenon that touches various fields of research. In order to give a structured overview of the literature of interest, it is expedient to disentangle the complex research landscape first. Following this, it is easier to focus on the work that is most relevant for this thesis. Research in the field of cryptocurrencies has taken four main paths. Each of these paths analyzes cryptocurrencies from a different angle due to the nature of the respective scientific field.
The first field comprises all the technological issues associated with cryptocurrencies. Among others, the main concern here are security aspects of the technology underlying cryptocurrencies. Eyal and Sirer (2013), for example, present a potential attack on Bitcoin which would allow a minority of colluding miners to obtain a disproportionate share of the mining revenues. They show that rational miners would join this minority until ultimately they are able to take over the whole network and thus reestablish a central authority. Others subject the security of transactions to critical scrutiny, and show that fast transactions are vulnerable regarding double-spending (Karame et al. 2012). Yet others try to improve the cryptography algorithms (Kogias et al. 2016; H. Wang et al. 2017) or analyze the public ledger in terms of decentralization (Feld et al. 2014). A large group has a look at the transactions stored in the blockchain. Ober et al. (2013) are interested in the dynamics of transactions, whereas Androulaki et al. (2013) reveal implications for user privacy when Bitcoin is used as primary currency for everyday spending in a university setting. They find that by using the public information of the blockchain it is possible to recover user profiles even when recommended privacy measures have been implemented to avoid that. Ron and Shamir (2013, 2014) conduct similar analyses with

Lukas M. König was born in Ludwigsburg in 1991. After his undergraduate degree in Engineering Management the author focused strongly on the quantitative fields of business economics. In 2018 he graduated with distinction and earned his master's degree in Financial Management at the University of Hohenheim. Inspired by his academic time in California he developed a cross-industry affinity for modern and disruptive technologies. During his time as a university student he worked as a scientific employee at the chair of Banking and Financial Services for Prof. Dr. Burghof. Besides his participation in research on the field of modern financial markets he conducted lectures and tutorials in the courses Fundamentals of Corporate Finance and Trading & Exchanges.