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Fintech: Financial Technology Research Guide

Cryptocurrency & Blockchain Technology

This section of the FinTech guide briefly covers cryptocurrency (like "Bitcoin") and blockchain technology (a protocol for a peer-to-peer electronic cash system).

Cryptocurrency

Cryptocurrency serves as a medium of exchange, a store of value, and a unit of measure. While cryptocurrencies have little inherent value, they are used to price the value of other assets. Bitcoin is a cryptocurrency (means of payment) but it can bee seen as a speculative commodity (how much is it trading for), it was launched in 2009 and it is widely considered the first digital asset. Digital assets, also known as crypto assets, are digital representations of value made possible by cryptography and blockchain. Their original intent was to serve as a vehicle for transferring value without the use of a bank or other trusted third-party entity. Cryptoassets (digital assets) are categorized into three main types: cryptocurrencies, crypto commodities, and crypto tokens.

Blockchain Technology

Perhaps in response to the 2008 global financial industry crash, a person, or an entity, named Satoshi Nakamoto developed a protocol for a peer-to-peer electronic cash system. That protocol became the foundation for distributed ledgers called blockchains. Blockchain is a bit like a global spreadsheet or ledger. It does not have a central database; instead, it runs on computers provided by volunteers around the world. A blockchain is public: anyone can view it at any time because it resides on the network, not within a single institution. A blockchain is encrypted and it uses public and private keys to maintain a sort of virtual security. A blockchain allows a person to safely send money to another person without going through a bank or financial services provider.

Many in the financial services industry refer to blockchain technology as distributed ledger technology. And some see blockchain as a more reliable database than their existing databases. As digital money becomes increasingly widespread, and coupled with an estimate that more than 50% of the world's population owns a smartphone, some believe that blockchain technology will supplant the banking industry’s old technology. This new financial technology partnership could be the pathway to widely available digital financial products.

Governments are starting to pay attention to cryptocurrencies. In 2015, the U.S. Commodity Futures Trading Commission decided that Bitcoin, and other virtual currencies, should be properly defined as commodities.

Additional Reading

The following sources from the Internet and from the print collections at the Library of Congress are useful in learning more about cryptocurrencies and blockchain technologies.

External Websites

Print Resources

This is just a selection of books on this topic. The books listed below link to fuller bibliographic information for each item in the the Library of Congress Online Catalog. Links are provided for additional online content when available.