The Merger of Cryptography and Finance - Do Cryptographic Economic Systems Lead to the Future of Money and Payments?

25 Pages Posted: 18 Jan 2015

See all articles by Josue Manuel Quintana Diaz

Josue Manuel Quintana Diaz

Goethe-University Frankfurt am Main - Faculty of Economics and Business Administration; Goethe-University Frankfurt am Main

Date Written: December 11, 2014

Abstract

What is accepted as payment has changed over time, and so have the ways in which payments are made. Bitcoin, a cryptographic computer protocol, represents for some just another currency to release and receive payments. For others to speculate or to diversify into an alternative asset class. In the following we will highlight why the Bitcoin protocol illustrates the first prototype of a cryptographic economic system, which is organized both autonomously and distributively - without any point of central control or single point of failure. The protocol pilots the first merger of cryptography and finance, where organizational operations adhere to the intractable institutions (rules) set by the protocol. More precise it showcased the worldwide first economic system on autopilot, which might not only change ’the Nature of the Firm’ as most famously discussed by Ronald Coase in 1937, but also the nature of economic development on basis of a more and more computerized economy, operating with significantly less transaction costs.

Keywords: economic system, money, cashless payments, self-enforcing institutions, Distributed Autonomous Organizations, Bitcoin, cryptography

JEL Classification: E40, O34, P10, L86, L22, G20

Suggested Citation

Quintana Diaz, Josue Manuel, The Merger of Cryptography and Finance - Do Cryptographic Economic Systems Lead to the Future of Money and Payments? (December 11, 2014). Available at SSRN: https://ssrn.com/abstract=2536876

Josue Manuel Quintana Diaz (Contact Author)

Goethe-University Frankfurt am Main - Faculty of Economics and Business Administration ( email )

Grüneburgplatz 1
Frankfurt am Main, 60323
Germany

Goethe-University Frankfurt am Main ( email )

Grüneburgplatz 1
Frankfurt am Main, 60323
Germany

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