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Blockchain and Money - Coggle Diagram

- - - - Protocol that mounts on top of the TCP/IP to provide encryption using ASYMETRIC case which is public infrastructure technology
    - - timestamped append-only log
        
        Auditable database; ledgers
      - Hash function: appends the next block to prior blocks; more importantly to compress data to manifulate it and verify it
        
        Consensus protocol: Decides who to trust to manipulate those hash functions
      - The combined economics of verification and netowrking and their trade offs
      - peer-to-peer alternative for establishing trust
- - - - The opportunity
        
        Finance is 7.5 percent of US economy equivalent to 1.5 trillion dollars in revenues
        
        US payment system is roughly 0.5 to 1 percent of our economy equivalent to 100 to 200 billion dollars of revenues; Visa is about 18 billion
        
        Commercial use cases
        
        Financial sector favors premissioned block vs permissionless
        
        Permissioned blockchains
        
        Known group of participants
        
        Control of the nodes
        
        Permissionless blockchains
        
        Unknown participants
        
        Security based incentives
        
        Crypto economics
        
        Payment systems
        
        Digital currency
        
        Secondary market trading; crypto exchanges & custody
        
        Venture capital; crowdfunding through ICOs
        
        Clearing, settlement, and processing
        
        Trade finance & Supply chain
        
        Digital IDs and data reporting
      - The risks
        
        Scalability and performance
        
        SEC requires modern payment to be resiliant to about 100,000 transactions per second; bitcoin can do 7 tx per second and Visa closer to 70 thousand tx per second
        
        Privacy and security
        
        Public information; not censorship resistance; makes public sector nervous
        
        Governance
        
        Blockchain software is hard to update
        
        Decentralized; No one is on control; No one to collect economic rents; also dont have someone with the ability to update the software....Facebook knows how to update their software its a governance challence
  - - - For some countries its a way to get around capital controls
    - - Initial Coin Offering (ICO)