Part 2 of our look at ways banks and financial institutions can use emerging blockchain technology.
Bitcoin and Blockchain
The rise of blockchain technology and associated cryptocurrencies is creating both exciting funding opportunities for young companies and potential regulatory battlegrounds.
Smart contracts are highly useful in many cases where contracting parties lack a strong ex post enforcement mechanism (like a court system) and need to pre-commit to not defrauding or otherwise taking advantage of each other when executing a contract.
Trends in crowdfunding and cryptocurrencies are converging into a mechanism catapulting cash-poor young companies and fashioning a new financing landscape.
Some of Europe’s biggest electricity operators plan to start trading on a blockchain platform before the end of this year, although a collision with the European Union’s regulatory apparatus remains a possibility.
With the meteoric rise of Bitcoin over the past few years, the seams of the system have begun to strain.
Contra Mises, explicit coordination might be used to launch an intrinsically worthless item. Such a view is in line with standard models of money employed by economists today. Coordination also seems to have played a role in launching bitcoin.
The American Revolution is still being fought, and the Washington-based administrative state is the biggest enemy.