Estimating Profitability of Alternative Cryptocurrencies (Short Paper)

Danny Yuxing Huang; Kirill Levchenko; Alex C. Snoeren

doi:10.1007/978-3-662-58387-6_22

Estimating Profitability of Alternative Cryptocurrencies (Short Paper)

Danny Yuxing Huang, Kirill Levchenko, Alex C. Snoeren

Electrical and Computer Engineering

Research output: Chapter in Book/Report/Conference proceeding › Conference contribution

Abstract

Digital currencies have flourished in recent years, buoyed by the tremendous success of Bitcoin. These blockchain-based currencies, called altcoins, are associated with a few thousand to millions of dollars of market capitalization. Altcoins have attracted enthusiasts who enter the market by mining or buying them, but the risks and rewards could potentially be significant, especially when the market is volatile. In this work, we estimate the potential profitability of mining and speculating 18 altcoins using real-world blockchain and trade data. Using opportunity cost as a metric, we estimate the mining cost for an altcoin with respect to a more popular but stable coin. For every dollar invested in mining or buying a coin, we compute the potential returns under various conditions, such as time of market entry and hold positions. While some coins offer the potential for spectacular returns, many follow a simple bubble-and-crash scenario, which highlights the extreme risks—and potential gains—in altcoin markets.

Original language	English (US)
Title of host publication	Financial Cryptography and Data Security - 22nd International Conference, FC 2018, Revised Selected Papers
Editors	Sarah Meiklejohn, Kazue Sako
Publisher	Springer Verlag
Pages	409-419
Number of pages	11
ISBN (Print)	9783662583869
DOIs	https://doi.org/10.1007/978-3-662-58387-6_22
State	Published - 2018
Event	22nd International Conference on Financial Cryptography and Data Security, 2018 - Nieuwpoort, Belgium Duration: Feb 26 2018 → Mar 2 2018

Publication series

Name	Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)
Volume	10957 LNCS
ISSN (Print)	0302-9743
ISSN (Electronic)	1611-3349

Conference

Conference	22nd International Conference on Financial Cryptography and Data Security, 2018
Country/Territory	Belgium
City	Nieuwpoort
Period	2/26/18 → 3/2/18

ASJC Scopus subject areas

Theoretical Computer Science
General Computer Science

Access to Document

10.1007/978-3-662-58387-6_22

Cite this

Huang, D. Y., Levchenko, K., & Snoeren, A. C. (2018). Estimating Profitability of Alternative Cryptocurrencies (Short Paper). In S. Meiklejohn, & K. Sako (Eds.), Financial Cryptography and Data Security - 22nd International Conference, FC 2018, Revised Selected Papers (pp. 409-419). (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics); Vol. 10957 LNCS). Springer Verlag. https://doi.org/10.1007/978-3-662-58387-6_22

Estimating Profitability of Alternative Cryptocurrencies (Short Paper). / Huang, Danny Yuxing; Levchenko, Kirill; Snoeren, Alex C.
Financial Cryptography and Data Security - 22nd International Conference, FC 2018, Revised Selected Papers. ed. / Sarah Meiklejohn; Kazue Sako. Springer Verlag, 2018. p. 409-419 (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics); Vol. 10957 LNCS).

Research output: Chapter in Book/Report/Conference proceeding › Conference contribution

Huang, DY, Levchenko, K & Snoeren, AC 2018, Estimating Profitability of Alternative Cryptocurrencies (Short Paper). in S Meiklejohn & K Sako (eds), Financial Cryptography and Data Security - 22nd International Conference, FC 2018, Revised Selected Papers. Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics), vol. 10957 LNCS, Springer Verlag, pp. 409-419, 22nd International Conference on Financial Cryptography and Data Security, 2018, Nieuwpoort, Belgium, 2/26/18. https://doi.org/10.1007/978-3-662-58387-6_22

Huang DY, Levchenko K, Snoeren AC. Estimating Profitability of Alternative Cryptocurrencies (Short Paper). In Meiklejohn S, Sako K, editors, Financial Cryptography and Data Security - 22nd International Conference, FC 2018, Revised Selected Papers. Springer Verlag. 2018. p. 409-419. (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)). doi: 10.1007/978-3-662-58387-6_22

Huang, Danny Yuxing ; Levchenko, Kirill ; Snoeren, Alex C. / Estimating Profitability of Alternative Cryptocurrencies (Short Paper). Financial Cryptography and Data Security - 22nd International Conference, FC 2018, Revised Selected Papers. editor / Sarah Meiklejohn ; Kazue Sako. Springer Verlag, 2018. pp. 409-419 (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)).

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Estimating Profitability of Alternative Cryptocurrencies (Short Paper)

Abstract

Publication series

Conference

ASJC Scopus subject areas

Access to Document

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