Cryptoeconomics

Cryptoeconomics refers to the combinations of cryptography, computer networks and game theory which provide secured and decentralized systems which use some set of economic incentives to provide for their maintainence.

  • Cryptography is used to prove properties established in the past, such as account balances, identities and ownership.
  • Digital representations of economic value become possible, accessible to all, assignable, exchangeable and immune to censorship, able to be relied upon in the future.

Bitcoin example

Desired properties of Bitcoin:

  • create a chain of immutable blocks
  • maintain a state in the blocks
  • maintain a clock
  • convergence: blocks can only be added to the end of the chain, never changed or removed
  • validity: only transactions that satisfy certain rule expressions (validity predicate) should be included in the blockchain, i.e. transaction script and valid sender-receiver and amount
  • clock must always be increasing
  • data availability: anyone can download all the blockchain data
  • TX availability: transactions should close reliably and quickly if reasonable fees are payed

Discussion questions

  • How can the availability of cryptocurrency coins affect the price of such coins in national fiat Dollar rates?
  • What might be cryptoeconomic dynamics of a basic income cryptocurrency coin?

Learning videos

References

See also

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