Speakers: Dr. Andrea Baronchelli (City University of London)
In this talk, Andrea Baronchelli will present two examples of how social dynamics shapes different aspects of the cryptocurrency ecosystem. First, He will focus on the resilience of the dark market ecosystem. He will analyse 24 separate episodes of unexpected marketplace closure by focusing on “migrating users” who move their trading activity to a different marketplace after a closure. He will show that most migrating users continue their trading activity on a single coexisting marketplace, typically the one with the highest trading volume. User migration is swift and trading volumes of migrating users recover quickly. Thus, although individual marketplaces might appear fragile, coordinated user migration guarantees overall systemic resilience. In the second example, He will consider the coding sphere. He will show that 4% of developers contribute to the code of more than one cryptocurrency and that the market reflects these cross-asset dependencies. In particular, the first coding event linking two cryptocurrencies through a common developer leads to the synchronization of their returns. This finding identifies a clear link between the collaborative development of cryptocurrencies and their market behavior. More broadly, it reveals a so-far overlooked systemic dimension for the transparency of general code-based ecosystems.