Quantifying the sustainability of Bitcoin and Blockchain

Abstract

Purpose: We develop new quantitative methods to estimate the level of speculation and long-term sustainability of Bitcoin and Blockchain. Design/Methodology/Approach: We explore the practical application of speculative bubble models to cryptocurrencies. We then show how the approach can be extended to provide estimated brand values using data from Google Trends. Findings: We confirm previous findings of speculative bubbles in cryptocurrency markets. Relatedly, Google searches for cryptocurrencies seem to be primarily driven by recent price rises. Overall results are sufficient to question the long-term sustainability of Bitcoin with the suggestion that Ethereum, Bitcoin Cash and Ripple may all enjoy technical advantages relative to Bitcoin. Our results also demonstrate that Blockchain has a distinct value and identity beyond cryptocurrencies - providing foundational support for the second generation of academic work on Blockchain. However, a relatively low estimated long-term growth rate suggests that the benefi ts of Blockchain may take a long time to be fully realised. Originality/value: We contribute to an emerging academic literature on Blockchain and to a more established literature exploring the use of Google data within business analytics. Our original contribution is to quantify the business value of Blockchain and related technologies using Google Trends.