Campbell R. Harvey
Duke University - Fuqua School of Business; National Bureau of Economic Research (NBER); Duke Innovation & Entrepreneurship Initiative
January 14, 2016
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 without using centralized institutions. 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 will increase in the future. Cryptofinance offers some solutions. This paper explores the mechanics of cryptofinance and a number of applications including bitcoin. Also attached is a slide deck that I use in my graduate course.
Number of Pages in PDF File: 141
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, Z00
Date posted: May 19, 2014 ; Last revised: January 16, 2016
© 2016 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollobot1 in 1.859 seconds