Authors: Matthew Zook*, University of Kentucky
Topics: Economic Geography
Keywords: blockchain, fintech, cryptocurrency, bitcoin, financial geography
Session Type: Paper
Start / End Time: 3:05 PM / 4:45 PM
Room: 8222, Park Tower Suites, Marriott, Lobby Level
Presentation File: No File Uploaded
In less than a decade Bitcoin and the technology of blockchain – a cryptographically-secured, algorithmically-regulated, distributed-ledger – emerged as the enfant terrible of the global economy. Despite this astronomical rise in value and interest from mainstream institutions such as the Federal Reserve Bank, little is known about where blockchain backed currencies are manifesting and how they are reshaping markets and investment practices. This paper analyzes (1) the geographies of core cryptocurrency functions, (2) how networks and use contribute to valuation of these new currencies and (3) how cryptocurrencies are affecting financing and entrepreneurial practices within tech-based startups. In particular, initial coin offerings (ICOs) represent a novel form of venture financing that changes the scale and scope of investment as well as encouraging firm structures that maximize hospitable regulatory locations. To date there have been more than 1,100 ICOs in which coins created a private currency of speculative value that provides a funding for entrepreneurs.