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vin136 / Crypto_project

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**WARNING**: This content is here only for personal purposes.

My thoughts and learning as I try to understand the crypto/blockchain world. This repo is my attempt at understanding the economics of blockchain tech and the problems it can solve .

Definitions: (as i define them)

Blockchain = Permissionless,Decentralized and Secure database technology.

Crypto = A scarce resource on the blockchain used to incentivize the participants.

Note : Here on i refer to Blockchain Technology as BCT.

Preface

Internet enabled almost free transfer of information. BCT allows for frictionless transfer of value.

When transaction btw buyer and seller, intermediary helps in verification process.

In return, buyers and sellers pay through:

  • transaction cost (fee to intermediary)
  • transaction data (privacy risk)
  • gives away the control over which transaction to occur(censorship risk)

Can a transaction happen without these ?

  • sharing information on a need to know basis

  • Allow parties to only access that is strictly necessary.(information leakage) eg: good credit standing without past transaction records

  • allows a network of economic agents to agree, at regular intervals, on the true state of a set of shared data without assigning residual rights to trusted entities.

  • secure provision, transfer and enforcement of property rights.

Reading This

  1. smart contracts - Nick Szabo
  2. whats wrong with traditional finance
  3. BCT for digital identity

Some problems: information about identity is often used to increase the safety of market interactions, reduce fraud and build robust digital reputation systems, but being able to link an online action and digital record on a blockchain to an offline individual or entity is as expensive with blockchain technology as it would be with more traditional solutions.

when frictions between offline events and their digital representations are high, these improvements are unlikely to materialize in the absence of complementary innovations, as intermediaries will still be able to control key existing complements to digital verification and use them to exert influence over market participants. What Problems Can I aim to solve with Blo ?

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