A Brief Introduction to Blockchain Economics

45 Pages Posted: 12 Sep 2019

See all articles by Long Chen

Long Chen

Luohan Academy; Cheung Kong Graduate School of Business

Lin William Cong

Cornell University

Yizhou Xiao

The Chinese University of Hong Kong (CUHK) - CUHK Business School

Date Written: August 10, 2019

Abstract

We introduce economic research on blockchains and its recent advances. In particular, we highlight unifying concepts on blockchain as decentralized consensus and its core benefits, (ii) equilibrium characterizations and allegedly irreducible tensions among consensus formation, decentralization, and scalability, (iii) major issues including network security, over-concentration, energy consumption and sustainability, adoption, multi-party computation and encryption, smart contracting, and information distribution and aggregation, and (iv) future directions concerning blockchains and their applications such as informational and agency issues, as well as game-theoretical and mechanism-design approaches to blockchain protocols.

Keywords: Bitcoin, Blockchain, Distributed Ledger, FinTech

Suggested Citation

Chen, Long and Cong, Lin and Xiao, Yizhou, A Brief Introduction to Blockchain Economics (August 10, 2019). Available at SSRN: https://ssrn.com/abstract=3442691 or http://dx.doi.org/10.2139/ssrn.3442691

Long Chen

Luohan Academy ( email )

No. 556, Xixi Road, Z Space
Xihu District
Hangzhou, Zhejiang 310013
China
+86-0571-2688-8888-75520 (Phone)

Cheung Kong Graduate School of Business ( email )

Oriental Plaza, Tower E3
One East Chang An Avenue
Beijing, 100738
China

Lin Cong (Contact Author)

Cornell University ( email )

Ithaca, NY 14853
United States

HOME PAGE: http://www.linwilliamcong.org

Yizhou Xiao

The Chinese University of Hong Kong (CUHK) - CUHK Business School ( email )

Cheng Yu Tung Building
12 Chak Cheung Street
Shatin, N.T.
Hong Kong

HOME PAGE: http://sites.google.com/site/yizhouxiao/

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