Domain: Finance.
Problem identification: Double spending problem in digital currencies.
Why Blockchain:
To avoid the necessity of trusting a centralized banking system.
Functional Description
A decentralized digital currency whose transactions are written in a blockchain and verified by agents called “miners” solving computationally intense puzzles to ensure the immutability of the ledger.
Consensus mechanism used
- Proof of Work (PoW)
Current status
- The most popular kind of digital currency, with a market cap well above $100 billion.
Focus point commentary indicating the value of the case study in relation with learning modules
Learning Modules Focus Points
Consensus Presents a use case of the PoW consensus mechanism
Limitations:
- High mining costs.
- Rising concentration of mining power.
Alternative Approaches:
- There’s no comparable alternative.
References
- Brunnermeier, M. K., James, H., & Landau, J. P. (2019). The digitalization of money (No. w26300). National Bureau of Economic Research.
- Halaburda, H., & Sarvary, M. (2016). Beyond bitcoin. The Economics of Digital Currencies.
- -Nakamoto, S. (2008). Bitcoin: A peer-to-peer electronic cash system.(2008).