Summary of The Hutchins Center Explains: How Blockchain Could Change the Financial System, Part 1

Looking for the article?
We have the summary! Get the key insights in just 5 minutes.

The Hutchins Center Explains: How Blockchain Could Change the Financial System, Part 1 summary
Start getting smarter:
or see our plans

Rating

8


Recommendation

While most people may not yet have bitcoins and other cryptocurrencies in their online wallets, the possibility that these virtual monies will transform the worldwide payment regime is real. Underlying this digital legal tender is the advanced technology of blockchains and distributed ledgers. In this first of two informative reports (click here for part 2), David Wessel of the Brookings Institution explains what the two innovations entail, how they operate, and what potential opportunities as well as risks they portend. getAbstract considers this useful primer required reading for those who want to understand the implications of the distributed ledger.

About the Author

David Wessel is director of the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution.

 

Summary

Global consumers and businesses may make cryptocurrencies such as bitcoin the most popular payment options in the future. But virtual currencies are just one facet of a broader technology transformation that, over time, may fundamentally upend the current framework of centralized payment systems controlled by central banks and financial institutions. The advance underlying this new dispersed exchange system is the distributed ledger, which relies on a blockchain – “a database that consists of chronologically arranged bundles of transactions known as blocks.”

The distributed...


More on this topic

By the same author

What is Yield Curve Control?
8
What Is “Average Inflation Targeting”?
8
Are Negative Rates a “Calamitous Misadventure"? ECB Economists Say No
9
The Hutchins Center Explains: How Blockchain Could Change the Financial System, Part 2
8
Avoiding another Big Financial Crisis
8

Customers who read this summary also read

A Reality Check for Blockchain in Commodity Trading
8
Cryptoassets
8
An Economic Analysis of Blockchains
8
The Big Blockchain Lie
9
Blockchain Babel
8
What Every Investor Needs to Know About Blockchain
8

Related Channels

Comment on this summary