September 14th, 2017

Cryptoeconomics Gives A Wide Range Of Benefits In Our Time

Residents of many countries these days take note of various aspects of the digital economy with an aim to fulfil their financial requirements. They are eager to find out easy to follow techniques to reap benefits from the cryptoeconomics regardless of the location and time. If they know about this digital economy as comprehensive as possible, then they can make a good decision and throw out overall obstacles on their path towards the profits. A crypto economics is a practical science that involves the design and characterization of protocols to govern creation,   distribution and consumption of services and goods in the digital economy with the decentralized nature.

Cryptoeconomic properties of bitcoin 
More than a few properties of cryptocurrency like bitcoin may confuse beginners to the cryptoeconomics.  You can overcome this confusion when you go through some of these properties as follows.

  •     Blockchain technology is used in the cryptocurrency

  •     Each block has transactions

  •     Transactions change the state of the block

  •     The blockchain should be immutable

  •     Valid transactions only allowed

  •     Downloadable nature of blockchain can be accessible from anywhere at any time

  •     A quick process to add transactions to the blockchain

Cryptocurrency game theory
Two sets of incentives used by participants in the blockchain are as follows.

  • Incentive set 1

  • Tokens

  • Privileges

  • Incentive set 2

  • Rewards

  • Punishments

Actors who take part in and contribute to the blockchain are assigned cryptocurrencies called tokens.  Privileges involve decision making rights of actors. Actors have the right to charge rent. For example, miners can charge transactions fees when they mine at least a few blocks.
All good participants in cryptonomics get a monetary reward. They also choose the decision making responsibility instead of the monetary reward. Punishments in the form of a monetary fine are given to bad participants. They may have their rights taken away rather than a monetary fine for behaving badly.

The best combination of cryptography and economics is used to make the blockchain technology.  The most modern crypto economics not only includes the study of economic intelligence, but also agents in the real technology framework. An applied blockchain technology in the real technology framework has an impact on both GNP and GDP of a community. An economic intelligence is able to serve in terms of the invisible hand and used to describe V.Buterin who has fulfilled the intervening intelligence role.

crypto economics definition