A Game of Prones - Cryptocurrency: Past Fraud, Present State, Future Game Theory Model. A report on the legitimate and fraudulent usage of cryptocurrencies within Latin American and Caribbean countries as well as an expanded game theory model for cryptocurrency mining.

Abstract

This interdisciplinary paper will examine the past, present and potential future usage of cryptocurrency, both legitimate and fraudulent, within Latin American and Caribbean countries. We will also propose an expanded game theory model which will synthesize in theoretical terms the options and behaviour of rational players in cryptocurrency markets. In the research of the past and present socioeconomic situation in Latin American and Caribbean, our work found extreme levels of wealth inequality, which in turn have consequences of having the few who control the wealth also control the political, legislative and executive power in the region. The situation has been ripe for governments defrauding their own citizens. A case study into the situation in Venezuela follows, where the government has outlawed cryptocurrency mining hardware imports, has seized existing legitimate cryptocurrency mining hardware from its law abiding citizens and now purports to pay government debt in fauxcoins Petro. The government claims Petro is a cryptocurrency but, in reality, it is nothing but another near worthless, Venezuelan government issued currency. On the future of cryptocurrency, our thesis composes a game theory model for Bitcoin cryptocurrency mining pools expanding on current game theory models with expanded options including two new fraudulent game options. These fraud game options are attacks by unethical actors within the Bitcoin cryptocurrency mining network against other Bitcoin participants and can result in billion dollar gains for the attacker. The work concludes with the resulting formulas and expressions derived from the game theory model as well as suggestions for future work.