Analysis of Contracts in Various Formats of Blockchain
7 Pages Posted: 9 Feb 2017
Date Written: December 27, 2016
One of the important features of Blockchain is that it allows the hosting and execution of contracts. Such a contract in the digital world is known as a Smart Contract. But the process and consequences of a contract vary radically from one format of Blockchain to another. One of the formats (and the most common at present) is the Unregulated Blockchain (like Bitcoin and Ethereum) with no government supervision whatsoever. Another format is the Controlled Blockchain which is managed and guaranteed by the Government. It is this difference that is vital in understanding the impacts and consequences of entering into and abiding by Smart Contracts.
Firstly, the concept of cryptocurrencies (also referred to as cryptocoins in this paper) is explained. Then the concept of Regulated and Sovereign Backed Cryptocurrencies (RSBCs) is discussed. Later on, I explain how contracts vary between the two Blockchain formats. Finally, the paper concludes as to how smart contracts can be best executed and on which format of Blockchain.
Keywords: blockchain, bitcoin, cryptocurrency, RSBC, nationcoins, K-Y Protocol
JEL Classification: D86, J52, K12, L14, L24, L33
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