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9 - Cryptographic Theory and Decentralized Finance

from The Third Era

Published online by Cambridge University Press:  24 March 2022

Seth C. Oranburg
Seth C. Oranburg
Affiliation:
Duquesne University, Pittsburgh
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Summary

Cryptocurrency markets are unregulated, and increasingly popular, places for ordinary investors to conduct transactions, not unlike the early Wild West of the First Era discussed in Chapter One. This Chapter explores the historical origins of cryptography and its application in the digital sphere. It begins with the Cypherpunk movement against traditional institutions and their demands for transactional privacy, which led the elusive Satoshi Nakamoto to introduce a viable alternative to traditional market transaction platforms in the form of Bitcoin, a cryptocorrency powered by blockchain technology. Blockchain transaction sequences, while anonymous or, more accurately, “pseudonymous,” are self-regulated system that allow users to transact without trusting each other and without having a trusted third-party intermediary. This novel technology ultimately led to the incredible success of Bitcoin currency, which dominates the cryptocurrency market today. Undeniably, Blockchain technologies are reshaping the financial landscape, but their implications extend far beyond the financial sector alone.

Keywords

cryptocurrencycryptographydigital currencyCypherpunkCrypto WarsSatoshi NakamotoBitcoin
Type
Chapter
Information
A History of Financial Technology and Regulation
From American Incorporation to Cryptocurrency and Crowdfunding
 , pp. 112 - 128
Publisher: Cambridge University Press
Print publication year: 2022

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