Hi Bhaskar,

Maybe this is a little different, but what about developing an analysis of the different initiatives in the field in the Asian Region?

As you probably now, the distributed ledger technology or "blockchain" is the basis of the bitcoinm cryptocurrencies and tokens ecosystem.

This technology is actually highly researched by nearly every big company and some governments and central banks for different use cases.

It is possible that at the end of the day, this technology could enable new solutions for different sectors, including the public sector in areas like payments, digital identity, distribution of information, time and user stamp on different cases, and so on and so forth.

The topics you mention could even serve you well for an empirical analysis, but I have some comments...

Regarding the first, today the situation is basicaly fuzzy... I mean, cryptocurrencies are hardly regulaqted, and there are regulations to come, what as usual, regulators are moving slow. The China case is a first move, and we will see more in the coming months. This is quite logical, because govenrments do not like payment systems without end users identification... The DLT technology offers the opportunity for creating the same payments but including the proper KYC and AML standard procedures, which are not in place for bitcoin and other cryptos today. Regarding the ICo story, this could be a thesys on its own... I am waiting for pueple trying to research and offer proposals for ICO fundamental valuation approaches. As you may know, tokens form ICOs could be "securities" if they deliver some way of participating in the cash flows of the underlying business, but they could be also "appcoins", offering the access to a service. In that case you could value a token as a presale of services or products... There is an entire new field for valuation techniques applied to these issues.

The secoind point is more of a traditional hard currency versus soft currency approach. And it does not matter if you think in terms in dollars or bitcoins... the only difference is the capabilities of the techonology (blockchain) to deliver short term frictionless international payments (that is hugh but not for a thesys).

The third point in my view is more for a technical thesys. And there is a lot of research for IT people in that field, not for an economist, in my view. The question about smart contracts could be revisited, but more for lawyers, or mixed profiles of lawyers and technical guys.

Regarding the last point it is, in my view more of the same. The distributed ledger technologies, even including complex smart contracts, do not include today the use of data science integrated into the smart contracts or the underlying blockchains. But there are use cases for integrationg of both technologies, for instance, IoT and blockchain, or the analysis of the interactions in a blockchain network. But it would be a classic case of employing big data or data science. The only difference would be that the date may come from blockchain transactions on the ledger.

Best!!

Carlos

Hi Carlos,

Thank you for your deep insights.

Regarding your first point "about developing an analysis of the different initiatives in the field in the Asian Region" - Can you deliberate a little more on this point ? Things are moving so fast in the crypto world that one can get outdated in a week or month.

I had initially thought of framing my research on Price determinants of Bitcoin and went on to collect data after some initial literature review. I found gaps in the existing LR (read around ~40 papers). However, down the line I realized that this area too may become outdated once I reach towards the end of my thesis.

Another interesting area which appeals me is the developments of "DLT technologies" and their use cases like KYC, anti-money laundering methods as you pointed out.

The Indian Central bank (Reserve Bank of India) has published a paper on Block chain and is deliberately maintaining a hands off approach from regulating the DLTs as of now. There will be a report from RBI sometime in Nov. regarding any regulations(if proposed).

Please let me know some good pointers based on your insights or interests so that I can explore them. I want to dedicated my full energy into one research area, If I am sure it would sustain for around 5 years till I get my degree -:) (being honest here)

I am a Technologist turned trader by background and these days working on FinTech tools. Please let me know if we can have a conversation to solve some research problem.

Regards,

Bhaskar

Hi Bhaskar, happy to help. If you want to engage into a detailed conversation about these topics just throw me a message and we could start a a debate about the situation and perspectives.

Anyway, (as you pointed out) I would argue that any investigation related to bitcoin behavior as a traded "asset" is not a big deal, because we all have a lot of theory and empircial research about each and every financial asset in the world, and bitcoin is not esencially different in terms of trading. If I were you, I will not be very interested in this topic.

There are some big areas that require the work of researchers that pretend to offer new insights into these technologies. I am an economist, so I will point to those related more to my area of expertise, but still you can even search for more. 

let me say a few:

a) Analysis of business models and interactions under decentralized protocols. This is a general topic, and covers things like, how those a decentralized digital identity identification systems may work?. How do you create incentives and punishments to align interests in the network? Who updates the information?, who can share the information?, what is the role of regulators and supervisors?, and so on... This analysis could be develop for KYC, AML, or whatever the topics are currently under research in the field.

b) Token analysis and valuation. Due to the ability of tokens to establish any claim or right as a separate source of value, there is going to be a huge effort in trying to adapt or create new valuation models for tokens with different internal characteristics (For example, how are you going to value a token that offers an access to a service?, and what if this token let´s you interact with this service creating new services on top of the protocol?, and what happens if the token is more like a traditional security, offering you the option of "renting the token" to others in exchange for a fee (like an interest rate or a dividend paid by a security?). There are lots of potential options, and this situation reminds me the famous theoretical approach of Kenneth Arrow which is known as "Arrow assets", perfect assets designed to offer a cash flow related to a particular state of the world.

c) The role of game theory in complex protocol arrangements. Bitcoin is an easy protocol, where there is only one layer of interaction. It is a pure peer to peer network, where the only variable that measures power is the number of bitcoins you own. But voting mechanisms related to more complex tasks may require the capability of creating complex interactions between token holders to "rent" decision power, create reputation layers, add "special capabilities" nodes, as a "veto node", for instance, related to a regulator.

d) The economies of central bank cryptocurrencies. This is also a fantastic topic for research for the next years. If a central bank decides to go crypto, issuing crypto euros, or crypto rupees or whatever, the role of the entire financial ecosystem could change depending on where do you put the end user. As an example, if a Central Bank creates wallets for every citizen and company in its country, monetary policy transmission channel would be directed to the end agent in the economy. If this wallet allows for simple transactions (paying or transferring crypto-ruppees), there would be a separation between credit and payments, and comercial banks would not be able to create money anymore. On the other side, if cripto issued currencies only sustitute paper money, then banks will retain their capabilities of creating money, and the system would not be very different as it is today. The only difference being the capacity of regulators and supervisors to trace any movement of cash, and so reducing or seriously limiting the options for money laundering or even black economy financing.

e) Pure token taxonomy. Disecting properties of tokens to establish clasifications of token usage and business models related to this tokens: As a mean of payment, as a reputation score, as a proof of identity or existence, as a proof of ownership or capability, .... . Other exciting topic is token interaction (see Bancor, for a first simple approach).

If you want to search for ideas, I am afraid that the academic community is a little bit behind the practicioners because this is moving very fast. Just look for white papers of ICOs and try to deeply understand the reason for the protocol or application, the economics of the tokens, the problem they try to solve and why using a decentralized network, and so on and so forth. Lots of ICOs are just (good or bad) ideas not suitable for launching a new token, but some of them deserve deeper analysis.

Well, these are some potential suggestions...

Best

Carlos

Thank you sir for your guidance and brilliant insights. All your suggestions are very interesting. All Points A to E look really exciting. Will do some home work and analysis and will definitely share my ideas/findings.

Really lucky and humbled to get such deep insights from you.

Regards,

Bhaskar

Hello Dr. Carlos,

It has been a while and I have been in the final stages of nailing down the objectives and hypothesis. The below three topics that you mentioned are very interesting but I am not sure if there are any data sources for these topics. Would request you to provide some guidance here.

b) Token analysis and valuation. - This definietly is interesting. I read about Arrow assets. Is there a way for data collection. I am definitely interested in this.

c) The role of game theory in complex protocol arrangements. - This again is interesting but no formal sources of data.

d) The economies of central bank cryptocurrencies. - Will not be able to get any data. Please let me know if there are any real time data availability upon which a research can be based. Also, I am not aware if any major central bank has issued a Crypto yet. Even if issued, there would not be an immediate adoption, so my research would not be an emperical one in that case if would be hard to justify. Though I can definitely write a paper on it.However, from a Thesis standpoint, it may not work out in abscence of data.

Best Regards,

Bhaskar