Bitcoin: A solution for payment systems or a solution in search of a problem?

Carlos Conesa ()
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Carlos Conesa: Banco de España

No 1901, Occasional Papers from Banco de España

Abstract: In October 2008 a mysterious article was published under the pseudonym Satoshi Nakamoto: “Bitcoin: a peer-to-peer electronic cash system”. Bitcoin’s entry into operation some months later in early 2009 barely caused a ripple. Since then, the scheme has accumulated more than half a million blocks in its blockchain and they include more than 300 million transactions. In view of the media impact of Bitcoin, it is worth explaining in some detail how Bitcoin works and what its limitations are. This article reviews the aims and basic functioning of Bitcoin, analyses its strengths and weaknesses, and discusses its usefulness as an exchange mechanism.

Keywords: blockchain; hash function; bitcoin; cryptoassets; cryptography; innovation; technology. (search for similar items in EconPapers)
JEL-codes: O31 O33 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2019-02
New Economics Papers: this item is included in nep-ict, nep-mon and nep-pay
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Persistent link: https://EconPapers.repec.org/RePEc:bde:opaper:1901

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