Thorsten Koeppl

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Staff Working Papers

The Economics of Cryptocurrencies—Bitcoin and Beyond

Staff Working Paper 2019-40 Jonathan Chiu, Thorsten Koeppl
Since the creation of Bitcoin in 2009, over 2,000 cryptocurrencies have been issued. We evaluate how well a cryptocurrency functions as a payment system.

Blockchain-Based Settlement for Asset Trading

Staff Working Paper 2018-45 Jonathan Chiu, Thorsten Koeppl
Can securities be settled on a blockchain and, if so, what are the gains relative to existing settlement systems? We consider a blockchain that ensures delivery versus payment by linking transfers of assets with payments and operates using a proof-of-work protocol. The main benefit of a blockchain is faster and more flexible settlement, whereas the challenge is to avoid settlement fails when participants fork the chain to get rid of trading losses.

Incentive Compatibility on the Blockchain

Staff Working Paper 2018-34 Jonathan Chiu, Thorsten Koeppl
A blockchain is a digital ledger that keeps track of a record of ownership without the need for a designated party to update and enforce changes to the record. The updating of the ledger is done directly by the users of the blockchain and is traditionally governed by a proof-of-work (PoW) protocol.

Trading Dynamics with Adverse Selection and Search: Market Freeze, Intervention and Recovery

Staff Working Paper 2011-30 Jonathan Chiu, Thorsten Koeppl
We study the trading dynamics in an asset market where the quality of assets is private information of the owner and finding a counterparty takes time. When trading of a financial asset ceases in equilibrium as a response to an adverse shock to asset quality, a large player can resurrect the market by buying up lemons which involves assuming financial losses.
Content Type(s): Staff Research, Staff Working Papers Topic(s): Financial markets, Financial stability JEL Code(s): E, E6, G, G1