Campbell R. Harvey
Duke University - Fuqua School of Business; National Bureau of Economic Research (NBER)
May 19, 2014
Cryptography is about communication in the presence of an adversary. Cryptofinance is the efficient exchange of ownership, the verification of ownership, as well as the ability to algorithmically design conditional contracts, all with security, privacy and minimal trust. Our current financial system is ripe for disruption. At a swipe of a debit or credit card, we are at risk (think of Target’s breach of 40 million cards). The cost of transacting using traditional methods is enormous and it will increase. Cryptofinance offers some solutions. This paper explores the mechanics of cryptofinance and a number of applications. Also attached is a slide deck that I use in my graduate course.
Number of Pages in PDF File: 108
Keywords: Cryptofinance, Bitcoin, Bubbles, Block chain, Blockchain, Cryptography, Mining, Proof of Work, Hash, Deflation, Nonce, SHA-256, Merkle tree, DSA, Private Key, Public Key, Key Pair, Wallet, BTC
JEL Classification: A10, C00, D00, E00, F00, G00, H00, I00, J00, K00, L00, M00, N00, O1, P00, Q00, R00, Z00working papers series
Date posted: May 19, 2014 ; Last revised: May 20, 2014
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