CRYPTO‐CURRENCIES – AN INTRODUCTION TO NOT‐SO‐FUNNY MONEYS

Abstract

Abstract We introduce the distributed ledger (blockchain) technology of crypto‐currencies. We examine the ‘monetary’ attributes of crypto‐currencies, and describe some of the reasons they have been adopted. The paper discusses the mechanics of Bitcoin – the original crypto‐currency – to illustrate the fundamental elements of decentralized crypto‐currencies. We then provide a high‐level summary of the implications of crypto‐currencies for consumers, financial systems, and for monetary and regulatory authorities. We argue that crypto‐currencies are unlikely to supplant traditional fiat currencies and we anticipate an enduring role for financial intermediaries in facilitating credit.