Blockchain, Cryptoassets and Fintech
- Module Code:
- FHEQ Level:
- Year of study:
- Year 1
- Taught in:
- Term 1
The rise of the blockchain technology and Distributed Electronic Ledgers (DELs) resulted in various opportunities and threats to existing economic and societal systems. Cryptocurrencies and cryptoassets pose various issues concerning, for example, their impact on monetary policy, payment systems, international financial flows, crime and taxation. Opportunities from the blockchain are offered in various areas like, for example, recording supply chain transactions and providing certified digital identities and qualifications.
The module aims to provide participants with the basic theoretical knowledge and critical tools for a comprehensive understanding of blockchain and (DEL) technology and its implications for business, financial institutions and markets, government and society. Issues that will be discussed include innovations such as the development of new business models, the disruption of existing strategies in sectors like banking and financial services, the full range of advantages, the limitations and risks of central bank-controlled digital currencies, and possible forms of distributed public services. The course will draw examples and case studies from the very early instances of the application of Blockchain and DEL.
The lectures will be very interactive. Students will be expected to participate actively through individual tasks and group discussions, where they will develop skills and capabilities about applying theories and methods to the opportunities and challenges posed by the blockchain and DEL technologies. In classes, students will be required to analyse and present assigned case studies.
Objectives and learning outcomes of the module
On successful completion of this module a student will be able to:
- Demonstrate a comprehensive understanding of the prospects for applying DEL and Blockchain technology to various areas including cryptocurrencies and smart contracts
- Explain the implications of DEL and Blockchain in terms of how it is likely to affect the future of business, banking and financial services, financial markets, central banking and government
- Evaluate the current debate around the modelling of DEL and Blockchain economy and the regulation and governance of DEL and Blockchain
- Critically appraise the economic and social impact of DEL and Blockchain technology.
Two hours of lectures, and one hour tutorial, per week. Ten weeks total.
Part I – Features of Blockchain technology
Lecture 1: Distributed electronic ledgers and Blockchain
- Abadi, J., & Brunnermeier, M. (2018). Blockchain Economics. mimeo Princeton University.
- Iansiti, M., & Lakhani, K. R. (2017). The truth about Blockchain. Harvard Business Review, 95(1), 118-127.
- Judmayer, A., Stifter, N., Krombholz, K., & Weippl, E. (2017). Blocks and Chains: Introduction to Bitcoin, Cryptocurrencies, and Their Consensus Mechanisms. Synthesis Lectures on Information Security, Privacy, & Trust, 9(1), 1-123.
- Mainelli, M., & Smith, M. (2015). “Sharing ledgers for sharing economies: an exploration of mutual distributed ledgers (aka Blockchain technology)”. The Journal of Financial Perspectives: FinTech, 3(3), 2-44.
- Tapscott, D., & Tapscott, A. (2016). Blockchain Revolution: How the Technology behind Bitcoin is Changing Money, Business, and the World. Penguin.
Lecture 2: Cryptocurrencies and ICO tokens
- Bech, M. L., & Garratt, R. (2017). Central bank cryptocurrencies. BIS Quarterly Review.
- Narayanan, A., Bonneau, J., Felten, E., Miller, A., & Goldfeder, S. (2016). Bitcoin and Cryptocurrency Technologies: A Comprehensive Introduction. Princeton University Press.
- Nica, O., Piotrowska, K., & Schenk-Hoppé, K. R. (2017). “Cryptocurrencies: concept and current market structure”. University of Manchester, FinTech Working Paper No. 1
- Vigna, P., & Casey, M. J. (2016). The Age of Cryptocurrency: How Bitcoin and the Blockchain are Challenging the Global Economic Order. Macmillan.
Lecture 3: Ethereum and smart contracts
- Peters, G. W., & Panayi, E. (2016). “Understanding modern banking ledgers through Blockchain technologies: Future of transaction processing and smart contracts on the internet of money”. In Banking Beyond Banks and Money (pp. 239-278). Springer.
- Rahwan, I. (2018). “Society-in-the-loop: programming the algorithmic social contract”. Ethics and Information Technology, 20(1), 5-14.
- Sklaroff, J. M. (2017). “Smart contracts and the cost of inflexibility”. University of Pennsylvania Law Review, 166, 263-303.
- Werbach, K., & Cornell, N. (2017). “Contracts Ex Machina”. Duke Law Journal, 67, 313-382.
Part II – Blockchain applications
Lecture 4: Blockchain in business
- Lucena, P., Binotto, A. P., Momo, F. D. S., & Kim, H. (2018). A Case Study for Grain Quality Assurance Tracking based on a Blockchain Business Network. arXiv preprint arXiv:1803.07877.
- Nowiński, W., & Kozma, M. (2017). How Can Blockchain Technology Disrupt the Existing Business Models?. Entrepreneurial Business and Economics Review, 5(3), 173-188.
- Yuan, Y., & Wang, F. Y. (2016). Towards Blockchain-based intelligent transportation systems. In Intelligent Transportation Systems (ITSC), 2016 IEEE 19th International Conference on (pp. 2663-2668). IEEE.
- Wessling, F., Ehmke, C., Hesenius, M., & Gruhn, V. (2018). How Much Blockchain Do You Need? Towards a Concept for Building Hybrid DApp Architectures. In 2018 IEEE/ACM 1st International Workshop on Emerging Trends in Software Engineering for Blockchain (WETSEB) (pp. 44-47). IEEE.
Lecture 5: Blockchain in banking, non-bank financial services and financial markets
- Fanning, K., & Centers, D. P. (2016). Blockchain and its coming impact on financial services. Journal of Corporate Accounting & Finance, 27(5), 53-57.
- MacDonald, T. J., Allen, D. W., & Potts, J. (2016). Blockchains and the boundaries of self- organized economies: Predictions for the future of banking. In Banking Beyond Banks and Money (pp. 279-296). Springer.
- Nicoletti, B. (2017). The Future of FinTech: Integrating Finance and Technology in Financial Services. Springer.
- Ross, E. S. (2017). “Nobody puts Blockchain in a corner: The disruptive role of Blockchain technology in the financial services industry and current regulatory issues”. Catholic University Journal of Law and Technology, 25(2), 7.
- Surujnath, R. (2017). “Off the Chain: A Guide to Blockchain Derivatives Markets and the Implications on Systemic Risk”. Fordham Journal of Corporate & Financial Law, 22, 257-304.
- Tapscott, A., & Tapscott, D. (2017). “How Blockchain is changing finance”. Harvard Business Review, March 1st.
- Klein, T., Pham Thu, H. and Walther, T. (2018), Bitcoin is not the New Gold – A comparison of volatility, correlation, and portfolio performance, International Review of Financial Analysis, 59, pp. 105-116.
- Guesmi, K., Saadi, S., Abid, I. and Ftiti, Z. (2018), Portfolio diversification with virtual currency: Evidence from bitcoin, International Review of Financial Analysis, In press, corrected proof, Available online 26 March 2018.
- Yi, S., Xu, Z. and Wang, G. (2018), Volatility connectedness in the cryptocurrency market: Is Bitcoin a dominant cryptocurrency?, International Review of Financial Analysis, In press, accepted manuscript, Available online 1 September 2018.
Lecture 6: Blockchain in central banking
- Claeys, G., Demertzis, M., & Efstathiou, K. (2018). “Cryptocurrencies and monetary policy”. Monetary Dialogue July 2018. EU ECON Committee.
- Meaning, J., Dyson, B., Barker, J., & Clayton, E. (2018). “Broadening narrow money: monetary policy with a central bank digital currency”. Bank of England, Staff Working Paper No. 724.
- Prasad, E. (2018). “Central Banking in a Digital Age: Stock-Taking and Preliminary Thoughts”. Brookings Institution.
- Berentsen, A., & Schar, F. (2018). “The case for central bank electronic money and the non- case for central bank cryptocurrencies”. Federal Reserve Bank of St. Louis Review, 100(2), 97-106.
- Kumhof, M., & Noone, C. (2018). “Central bank digital currencies-design principles and balance sheet implications”. Bank of England Staff Working Paper No. 725.
Lecture 7: Blockchain in government
- Berryhill, J., Bourgery, T. & Hanson, A. (2018), “Blockchains Unchained: Blockchain Technology and its Use in the Public Sector”, OECD Working Papers on Public Governance, No. 28, OECD Publishing, Paris.
- Dyson, L. (Ed.). (2013). Beyond Transparency: Open Data and the Future of Civic Innovation. Code for America Press.
- Mainelli, M. (2017), “Blockchain will help us prove our identities in a digital world”. Harvard Business Review (16 th March), https://hbr.org/2017/03/blockchain-will-help-us-prove-our-identities-in-a-digital-world
- Ølnes, S., Ubacht, J., & Janssen, M. F. W. H. A. (2017). Blockchain in government: Benefits and implications of distributed ledger technology for information sharing. Government Information Quarterly: an international journal of information technology management, policies, and practices, 34(3), 355-364.
- Reinsberg, B. (2018). “Blockchain technology and the governance of foreign aid”. Centre for Business Research, University of Cambridge Working Paper No. 505
- Viswanathan, M. (2017). “Tax Compliance in a Decentralizing Economy”. Georgia State University Law Review, 34, 283-333.
Part III – Blockchain open issues
Lecture 8: Modelling the Blockchain economy
- Catalini, C., & Gans, J. S. (2016). Some simple economics of the Blockchain. National Bureau of Economic Research Working Paper No. 22952.
- Chiu, J., & Koeppl, T. (2018). Incentive compatibility on the Blockchain. Bank of Canada Working Paper No. 34.
- Cong, L. W., Li, Y., & Wang, N. (2018). Tokenomics: Dynamic adoption and valuation. (working paper)
- Ma, J., Gans, J. S., & Tourky, R. (2018). Market structure in bitcoin mining. National Bureau of Economic Research Working Paper No. 24242.
- Thum, M. (2018, April). The Economic Cost of Bitcoin Mining. In CESifo Forum (Vol. 19, No. 1, pp. 43-45). Institut für Wirtschaftsforschung (Ifo).
Lecture 9: Regulation and governance of Blockchain
- Andrews, L., Benbouzid, B, Brice, J., Bygrave, L. A., Demortain, D. Griffiths, A., Lodge, M., Mennicken, A., & Yeung, K. (2017), Algorithmic Regulation, CARR Discussion Paper No. 85, LSE.
- Beck, R., Müller-Bloch, C., & King, J. L. (2018, forthcoming). “Governance in the Blockchain Economy: A Framework and Research Agenda”. Journal of the Association for Information Systems.
- Girasa, R. (2018). Regulation of Cryptocurrencies and Blockchain Technologies: National and International Perspectives. Springer.
- Rasul, H. (2018). “Does Bitcoin need regulation? An analysis of Bitcoin’s decentralized nature as a security and regulatory concern for governments”. Political Analysis, 19(1), 9.
- Ma, D. (2017). “Taking a Byte out of Bitcoin Regulation”. Albany Law Journal of Science & Technology, 27, 1-31.
- Sherlock, M. (2017). “Bitcoin: The Case against Strict Regulation”. Review of Banking & Financial Law, 36, 975-1020.
Lecture 10: The economic and social impact of Blockchain
- Atzori, M. (2015). “Blockchain Technology and Decentralized Governance: Is the State Still Necessary?” Available at SSRN: https://ssrn.com/abstract=2709713 or http://dx.doi.org/10.2139/ssrn.2709713
- Gabison, G. (2016). “Policy considerations for the Blockchain technology public and private applications”. SMU Science Technology Law Review, 19, 327-350.
- Manohar, A., & Briggs, J. (2018). “Identity Management in the Age of Blockchain 3.0”. Presented at the CHI 2018 Workshop on HCI for Blockchain: Studying, Critiquing, Designing and Envisioning Distributed Ledger Technologies.
- Mattila, J. (2016). “The Blockchain phenomenon”. Berkeley Roundtable of the International Economy Working Paper 2016-1.