Blockchain: What It Is, What It Does, and Why You Probably Don’t Need One
Abstract
All record-keeping systems (which include monetary systems) must contend with trust issues and methods of organizing historical information. Conventional systems rely on the reputation of central authorities and record-keepers to achieve consensus. Blockchain, which powers Bitcoin, differs from conventional systems by achieving consensus through a community of anonymous (and therefore "trustless") agents who compete amongst themselves to authenticate transactions. The promise of the blockchain protocol is that it is invulnerable to human foibles. Novel, for sure; but is it worth all the effort?
Citation
David Andolfatto, "Blockchain: What It Is, What It Does, and Why You Probably Don’t Need One," Federal Reserve Bank of St. Louis Review, Second Quarter 2018, pp. 87-95.
https://doi.org/10.20955/r.2018.87-95
Editors in Chief
Michael Owyang and Juan Sanchez
This journal of scholarly research delves into monetary policy, macroeconomics, and more. Views expressed are not necessarily those of the St. Louis Fed or Federal Reserve System. View the full archive (pre-2018).
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