- Cost-effective
- Efficient
- Safe and secure
- Building trust
- Business benefits

Advantages of blockchain

- Consensus
- Provenance
- Immutability
- Finality

Characteristics of blockchain networks

- Financial Services
- Insurance
- Government
- Supply Chain Management
- Healthcare
- The Internet of Things (IoT)
- Web3
- DeFi
- Music Industry
- Land Registration
- Business
- Video games

Blockchain Use Cases

- Blocks and blockchain networks
- Distributed ledgers
- Participants
- Assets, transactions, and channels
- Consensus
- Smart contracts and chaincode
- Peer-to-peer replication
- Digital signatures
- Cryptographic hashes
- Wallet

Blockchain Key Terms

- Blockchain For Dummies® IBM Limited Edition 
- Mastering Blockchain: Deeper Insights into Decentralization, Cryptography, Bitcoin, and Popular Blockchain Frameworks
- Get started with blockchain: Explore the basics of blockchain and get started building a solid foundation
- The Blockchain Technology on the Music Industry
- Blockchain Without Waste: Proof-of-Stake
- Blockchain for Business Whitepaper (MIT)
- Blockchain Technology for Healthcare: Facilitating the Transition to Patient-Driven Interoperability
- Decentralized Finance: On Blockchain and Smart Contract-Based Financial Markets
- Blockchain basics: Introduction to distributed ledgers
- Merkle Tree
- Some Simple Economics of the Blockchain
- Blockchainizing Food Law: Implications for Food Safety, Traceability, and Sustainability
- The ICO Gold Rush
-Blockchain Technology and Decentralized Governance: Is the State Still Necessary?

Blockchain References

The applications of blockchain in real-life scenarios

Use Cases of Blockchain Technology

Disadvantages of blockchain

Ethereum is alternative protocol to Bitcoin for building decentralized applications.   

It is open-source, has smart-contract functionality, and allows users to create their own arbitrary rules for ownership, transaction formats and state transition functions.

Ethereum

Tracks and records transactions of assets through utilizing a shared, decentralized ledger. Used to reduce the risks and costs of tracking and trading things of value.

University of Michigan - Ann Arbor

University of Minnesota - Twin Cities

New York University

The study of economic concepts (i.e., game theory, etc.)  applied to cryptocurrency, blockchain networks, and protocols.

Cryptoeconomics

Gupta, Manav. Blockchain For Dummies® IBM Limited Edition, IBM, bertrandszoghy.files.wordpress.com/2017/05/ibm-blockchain-for-dummies.pdf. 

Blockchain For Dummies® IBM Limited Edition

The study of the economics of token issuance, sale, purchase and investment.

Tokenomics

Blockchain

Currencies build on a blockchain i.e., Bitcoin, Ethereum, etc. They can serve numerous purposes, including stores of value, hosts for dApps and more.

Cryptocurrencies

- Top 10 Cryptocurrencies In October 2021
- Terrorism financing: Crypto-Taliban? 
- Countering the Use of Cryptocurrencies for Terrorist Financing
- Cryptocurrencies in Emerging Markets: A Stablecoin Solution?
- Stablecoins: risks, potential and regulation
- Regulating the Crypto World - New Developments from France
- Antitrust Economics of Cryptocurrency Mining
- Initial coin offerings and the value of crypto tokens

General Cryptoeconomics References

- Barter economics

- Currency

- Digitalization of currency


Evolution Of Currency

Based on the scenario provided, analyze the economic factors that discourage an attack on the network. Explain why it is often considered an economically irrational action in a large, established system.

Economic Incentives in a Decentralized Network

In a traditional financial system, a central authority like a bank prevents the same digital money from being spent more than once. In a decentralized digital currency network, there is no such central authority. Analyze how economic principles and incentive structures are used within these networks to solve this 'double-spend' problem without relying on a central intermediary.

The Role of Economic Incentives in Decentralized Systems

A new decentralized digital ledger system is designed where participants, called 'keepers,' are rewarded with digital tokens for validating transactions and adding them to the ledger. However, if a keeper attempts to approve a fraudulent transaction, they forfeit a significant amount of tokens they have previously 'staked' as collateral. Which economic principle is most central to ensuring the integrity of this system?

Match each mechanism found in decentralized digital networks with the primary economic problem it is designed to solve.

A new decentralized file storage network is proposed. In this system, users pay a fee to upload their files, and 'hosts' earn rewards for storing these files. The system's protocol rewards hosts a fixed amount of digital currency each month for every file they are assigned to store, based on a public list of assignments. There is no mechanism to periodically check if the hosts are actually storing the files they claim to be storing. From an economic standpoint, evaluate the long-term viability of this network's design. What is the primary economic flaw, and what behavior would you predict from rational hosts?

Evaluating a Cryptoeconomic Model

A decentralized network's security is guaranteed as long as the economic rewards for honest participation are greater than the potential gains from attacking the network.

Imagine you are tasked with designing the economic model for a new decentralized ride-sharing application that operates without a central company. Your goal is to ensure both riders and drivers act honestly. Describe the key economic incentives you would implement. Your description should include:
1. The main participants in the network.
2. The role of a native digital token.
3. At least two specific mechanisms to encourage good behavior (e.g., timely pickups, fair payments, accurate ratings) and/or discourage bad behavior.
Justify why your proposed mechanisms would be effective from an economic perspective.

Designing a Decentralized Ride-Sharing Protocol

A new decentralized file storage network is proposed. Users pay a single, upfront fee to have their files stored 'permanently'. Individuals acting as 'storage providers' receive a portion of this fee for agreeing to store a copy of the file. The protocol only governs the initial payment and file transfer. Based on the economic principles that govern such networks, identify the primary long-term risk to the network's integrity and explain the rational behavior this incentive structure encourages in the storage providers.

Incentive Flaw in a Decentralized System

Analyze the following scenario describing a decentralized file storage network. Identify the primary cryptoeconomic vulnerability and explain, using the values provided, how a rational, self-interested participant might exploit this vulnerability.

Analyzing a Flawed Decentralized Storage Network

A decentralized file storage network rewards 'providers' for hosting user files. The system verifies storage by randomly checking for a file's existence once per day. To cut operational costs, a group of providers begins storing only a small, frequently-checked portion of each user's data, deleting the rest. This behavior goes undetected for some time, leading to significant data loss across the network. Which economic principle best explains this design flaw?

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