The digital traces of bubbles: feedback cycles between socio-economic signals in the Bitcoin economy.

ABSTRACT: What is the role of social interactions in the creation of price bubbles? Answering this question requires obtaining collective behavioural traces generated by the activity of a large number of actors. Digital currencies offer a unique possibility to measure socio-economic signals from such digital traces. Here, we focus on Bitcoin, the most popular cryptocurrency. Bitcoin has experienced periods of rapid increase in exchange rates (price) followed by sharp decline; we hypothesize that these fluctuations are largely driven by the interplay between different social phenomena. We thus quantify four socio-economic signals about Bitcoin from large datasets: price on online exchanges, volume of word-of-mouth communication in online social media, volume of information search and user base growth

SUBMITTER: Garcia D 

PROVIDER: S-EPMC4233744 | biostudies-literature | 2014 Oct

REPOSITORIES: biostudies-literature