Master Thesis Project Collaboration Wanted

Name
Luca Mellone
University
Roskilde University (RU), DK
Degree & Study program
Master in Economics and Business Administration
GPA: 10.0
Category
Economic finance & accounting
Keywords
Blockchain
Portfolio Optimisation
Danish financial system
Proposal
LUCA MELLONE MASTER STUDENT ECONOMICS AND BUSINESS ADMINISTRATION RESEARCH QUESTION 1 ABSTRACT MASTER THESIS IN ECONOMICS AND BUSINESS ADMINISTRATION FALL 2018 - PROPOSALS Cryptocurrencies for Investment Portfolio Optimization. In the dawn of the 2008’s financial crisis, an anonymous programmer with the alias Satoshi Nakamoto invented Bitcoin, a new transaction technology. Bitcoin is a digital and decentralized currency used in peer-to-peer transactions where no intermediary is needed. Blockchain, like other cryptocurrencies is built on the Blockchain, a disruptive technology that is an open, distributed, and public ledger. Unlike other transactions, cryptocurrency transactions do not require a third party or bank for verification, but are verified via cryptographic proof, thus the term cryptocurrency. The value of a cryptocurrency is determined to only base on supply and demand. The supply of a cryptocurrency is made through computer resources to tackle mathematical problems. Cryptocurrencies are not possessing the involvements of any regulatory entities such as financial institutions, responsible central banks or clearinghouses in trading. Thus, many users are preferring the decentralized crypto money over fiat currencies as the supply of cryptocurrencies is completely independent of banking policies. Following the financial crisis, the global, economic environment has been transformed. As a result, investors are looking for potential and innovative investment opportunities. Cryptocurrencies have become more and more advanced and popular to the media and recently, they are being implemented as fashionable methods of payment via the Internet. There are numerous legal and illegal transaction being performed in cryptocurrencies. As such, the establishment of cryptocurrency exchange-traded funds, such as the Winklevoss Bitcoin Trust, show that cryptocurrencies are a suitable tool for investors. In order to test the validity of this hypothesis, the following research questions will be addressed: ▪ Are cryptocurrencies a suitable tool for investors seeking for portfolio diversification? The main aim of this study is identifying whether or not cryptocurrencies are a favorable tool for a diversified portfolio. This will be done through : ▪ the analysis and explanation of what causes the unusually high volatilities ▪ identification of the types of risk ▪ determining the behavior of cryptocurrency returns in comparison with global stock markets. RESEARCH QUESTION 2 ABSTRACT The Application of The Blockchain technology in the financial sector as a Cost reduction strategy. This thesis seeks to investigate the potential of blockchain to cut the transactional cost in the financial sector. Blockchain technology was initially designed as “a digital ledger in which transactions made in bitcoin or another cryptocurrency are recorded chronologically and publicly.” Just as predicted, the “information revolution” helped to deliver extensive changes which dramatically altered the way and medium through which the world conducted business transactions, competed, obtained services, managed resources, and connected globally. The predicted driving force of that era was the digitisation of operations with the help of connected computing devices around the world. Just as the invention of the steam engine helped human beings overcome the limitations imposed by their human bodies and ushered in the industrial revolution, continuous digitisation in the form of “information revolution” helped the world to amplify the mental capabilities of human beings with the help of connected mobile computers. Research on the blockchain technology has mainly studied it in relation to the Bitcoin cryptocurrency. However, this new technology has a huge potential to be implemented in a wide range of industries. When a new transaction is made, the blockchain records all the details of this transaction and the addition of this verified record to an already existing set of previously validated records further strengthens the integrity of the whole blockchain. Even though the world finance appears to the most visible application of blockchain technology’s ability to overcome this spending problem, this development has broader applications beyond finance. A fundamental element of blockchain is the non-reliance of blockchain systems on one central body or organisation. This feature requires the storage and updating of data in multiple locations. This element makes it possible for users of a blockchain system to have copies of the data stored. The thesis hypothesizes that blockchain technology helps to cut the transactional costs when transferring money. In order to test the validity of this hypothesis, the following research questions will be addressed: ▪ What is the blockchain technology? ▪ What are the potential applications of blockchain? ▪ How effective is blockchain in cutting transactional costs? To answer these questions, the thesis will: ▪ Review the existing literature related to blockchain and its application in the financial sector. ▪ Develop a working model to calculate the transactional cost using the blockchain technology. ▪ Carry out an empirical case study to test the model. RESEARCH QUESTION 3 ABSTRACT How does Blockchain change the financial sector: The Case of the Danish Financial Sector. This thesis studies the application of blockchain in the financial sector. It purports to explain the changes in the financial sector via blockchain. Basically, the paper aims at finding out how blockchain is applied to the financial sector. An investigation of the Danish financial market will be carried out to examine the expansion of blockchain into the different industries of the financial sector, such as remittance, settlement, smart contracts and banks. The thesis hypothesizes that blockchain has a positive effect on the financial sector. Public debates about the policy changes, regulation, dangers and the promise of this disruptive technology are not in short. From questions about the classification of virtual currencies to the ethical questions about its ability to support untraceable exchanges. Even without a proper regulatory mechanism or framework, the adoption and popularity of blockchain have soared and show no sign of slowing down. In order to test the validity of this hypothesis, the following research questions will be addressed: ▪ What is the blockchain technology? ▪ How is blockchain affecting the financial sector? ▪ What are the possible applications of blockchain in the Danish financial sector? ▪ How ready is the Danish banking sector to embrace blockchain? To answer these questions, the thesis will: ▪ Review the existing literature related to blockchain and its application in the banking sector. ▪ Develop a framework model to assess the current state of the art of blockchain in the Danish banking sector ▪ Carry out an empirical case study to test the hypothesis.

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