Crypto Review – Inaugural Issue
We are pleased to announce the inaugural issue of Crypto Review.
It began in the winter of 2018, when mainstream opinions voiced the end of cryptocurrency. We believed otherwise. Thanks to nearly one year’s effort and contribution from our colleagues, friends, and supporters, Crypto Review is created to bring you cryptocurrency focused, forward looking content with long term impact from both industry and academic perspective.
Austrian School economist and Nobel Laureate Friedrich August von Hayek published “The Denationalization of Money” in 1976, five years after U.S. President Richard Nixon unilaterally ended the international convertibility of the US dollar to gold and replaced the Bretton Woods system with pure fiat monetary regime. In his book, Professor Hayek envisioned a world with competing currencies issued by private businesses, and individuals choose the best ones to use. It is a world of the Separation of Money and State.
Professor Hayek passed away in 1992, too soon to witness his proposal being gradually realized by Cypherpunk programmers, not economists, in the age of Internet. The pursuit of a digital, peer-to-peer, non-sovereign monetary system utilizing cryptography began with David Chaum’s “Blind Signatures for Untraceable Payments” in 1983. Many projects in the 1990s, including b-money, Bitgold, and Hashcash, did not result in an actual cryptocurrency but nevertheless tested the essential technical building blocks. Finally, our world was forever changed on January 3rd, 2009, when a mysterious genius called Satoshi Nakamoto combined public-key cryptography, distributed nodes, blockchain structure, and proof-of-work in a functioning way and mined Bitcoin’s genesis block.
Ten years later, Bitcoin is currently serving as a borderless, censorship-free, apolitical, digital medium of exchange and store of value for whoever has access to the internet. As of September 2019, the existing supply of Bitcoin has a market capitalization of near 200 billion US dollar. We believe it is still very early, thus create Crypto Review to glimpse into the future.
Cryptocurrency is an interdisciplinary subject that depends on the knowledge of mathematics, computer science, game theory, and economics. It may impose great technological, economic, and political impact to our world. Crypto Review will provide full-spectrum coverage on cryptocurrency to our readers and focus on topics that have potential long-term impact.
In this inaugural issue, we bring you the following six articles:
“Global (Crypto) Currencies and Currency Competition” is authored by scholars associated with Becker Friedman Institute for Economics at The University of Chicago. It theoretically explores the dynamic of currency competition introduced by cryptocurrencies. It derives profound implications on monetary policy and the foreign exchange market.
“Impacts of Consensus Algorithms in Cryptocurrency: A Theoretical Analysis of PoW versus PoS in Ethereum” compares the current Proof-of-Work consensus mechanism with the proposed Proof-of-Stake mechanism. It suggests that neither can dominate. The choice between PoW and PoS is a trade-off and should depends on Ethereum community’s preference.
“Swimming with Fishes and Sharks: Beneath the Surface of Queue-based Ethereum Mining Pools” investigates the reward distribution scheme of Ethereum mining pool and finds a vulnerability of the queue-based reward scheme. Its result can be applied to other Proof-of-Work based cryptocurrencies that utilize mining pools to coordinate hash power.
“Making Tokens Governable” provides a practitioner’s perspective about reconciling crypto tokens and the regulatory environment. It suggests the positive feedbacks between crypto industry and regulators may lead to a more decentralized regulatory regime in the future.
“Cryptocurrency as Directly Investable Protocol” takes the decentralized crypto ecosystem as a new method of financing projects, such as open source software, that have difficulty in raising fund through the traditional capital market. It also analyzes the benefit vs cost of funding a project through decentralized cryptocurrency.
We also provide an English version of “Conceptual Prototype of Chinese Digital Fiat Currency”, which may has served as the guidance for the upcoming central bank digital currency (CBDC). Although many voices in the crypto community do not consider CBDC as real cryptocurrency, we believe serious discussion about this subject is beneficial to the development of crypto industry as it is part of the grand currency competition game.
We hope you will find these articles informative and inspiring. We believe cryptocurrency will provide humanity a future with greater liberty and prosperity.
