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The Butterfly "Affect": impact of development practices on cryptocurrency prices

Bartolucci, S; Destefanis, G; Ortu, M; Uras, N; Marchesi, M; Tonelli, R; (2020) The Butterfly "Affect": impact of development practices on cryptocurrency prices. EPJ Data Science , 9 , Article 21. 10.1140/epjds/s13688-020-00239-6. Green open access

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Abstract

The network of developers in distributed ledgers and blockchains open source projects is essential to maintaining the platform: understanding the structure of their exchanges, analysing their activity and its quality (e.g. issues resolution times, politeness in comments) is important to determine how “healthy” and efficient a project is. The quality of a project affects the trust in the platform, and therefore the value of the digital tokens exchanged over it. In this paper, we investigate whether developers’ emotions can effectively provide insights that can improve the prediction of the price of tokens. We consider developers’ comments and activity for two major blockchain projects, namely Ethereum and Bitcoin, extracted from Github. We measure sentiment and emotions (joy, love, anger, etc.) of the developers’ comments over time, and test the corresponding time series (i.e. the affect time series) for correlations and causality with the Bitcoin/Ethereum time series of prices. Our analysis shows the existence of a Granger-causality between the time series of developers’ emotions and Bitcoin/Ethereum price. Moreover, using an artificial recurrent neural network (LSTM), we can show that the Root Mean Square Error (RMSE)—associated with the prediction of the prices of cryptocurrencies—significantly decreases when including the affect time series.

Type: Article
Title: The Butterfly "Affect": impact of development practices on cryptocurrency prices
Open access status: An open access version is available from UCL Discovery
DOI: 10.1140/epjds/s13688-020-00239-6
Publisher version: https://doi.org/10.1140/epjds/s13688-020-00239-6
Language: English
Additional information: This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article’s Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article’s Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/.
Keywords: Blockchain; Open source software development; Data mining
UCL classification: UCL
UCL > Provost and Vice Provost Offices
UCL > Provost and Vice Provost Offices > UCL BEAMS
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science > Dept of Computer Science
URI: https://discovery.ucl.ac.uk/id/eprint/10109151
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