The use of logic circuits to classify blockchains

Carlo Gola (), Patrizio Fiorenza (), Federica Laurino () and Lorenzo Lesina ()
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Carlo Gola: Bank of Italy
Patrizio Fiorenza: Bank of Italy
Federica Laurino: Bank of Italy
Lorenzo Lesina: Bank of Italy

No 774, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: The work provides a method to classify blockchains and computing systems based on distributed ledger technology (DLT) and facilitate their comparison. In fact, DLTs are difficult to compare since they adopt different technological configurations, distinguished by the activities they perform and their technical characteristics and governance structures. Furthermore, some DLTs combine traditional decision-making processes with automated organizational procedures, while others adopt entirely algorithmic governance. The paper describes the main characteristics of DLTs: the degree of decentralization, the type of consensus protocol, the updating system, the governance structure, and the possibility of splitting the register (forking). The work uses the theory of switching circuits to visually represent and compare different DLTs based on their characteristics. This methodology is applied to Ethereum and Polkadot, two particularly complex DLTs.

Keywords: blockchain; DLT; cripto-asset; decentralised finance; banking and financial supervision (search for similar items in EconPapers)
JEL-codes: D82 G14 G21 G28 G3 M15 M4 O33 (search for similar items in EconPapers)
Date: 2023-06
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:opques:qef_774_23

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