Establishing cryptocurrency equilibria through game theory
Open Access
- 1 January 2019
- journal article
- research article
- Published by American Institute of Mathematical Sciences (AIMS) in AIMS Mathematics
- Vol. 4 (3), 420-436
- https://doi.org/10.3934/math.2019.3.420
Abstract
We utilize optimization methods to determine equilibria of cryptocurrencies. A core group, the wealthy, fears the loss of assets that can be seized by a government. Volatility may be influenced by speculators. The wealthy must divide their assets between the home currency and the cryptocurrency, while the government decides the probability of seizing a fraction the assets of this group. We establish conditions for existence and uniqueness of Nash equilibria. Also examined is the separate timescale problem in which the government policy cannot be reversed, while the wealthy can adjust their allocation in reaction to the government's designation of probability.Keywords
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