The Blockchain Alternative (eBook)

Rethinking Macroeconomic Policy and Economic Theory

Kariappa Bheemaiah (Autor)

eBook Download: PDF

2017 | 1st ed.
XX, 248 Seiten
Apress (Verlag)
978-1-4842-2674-2 (ISBN)

Infos

Gain an understanding of how finance and economics work today, and how the convergence of various technologies related to the financial sector can help you find solutions to problems, such as excessive debt creation, banks getting too big to fail, and shadow banking. This book offers sensible alternatives to outdated and incorrect dogmas, such as the efficient markets hypothesis and rational expectations theory. You'll also be introduced to universal basic income, the consequences of going cashless, why complexity economics needs to be understood and what kinds of tools and theories you'll need to redefine the existing definition of capitalism.

While the book does discuss technologies and methods that are primed for our future, a number of references are made to economic history and the works of great thinkers from a different era. You'll see how the blockchain can be used to deploy solutions that were devised in the past, but which can serve as the antidote to our current economic malaises. You'll discover that what is required today is not an adaptation of the old theories, but a new methodology that is suited to this new era. Without undertaking such an endeavor, one will always be burdened with a definition of capitalism that is out of kilter with the evolution of our digital humanity.

The Blockchain Alternative examines what would happen if we were to deploy this technology at the sovereign level and use it to create a decentralized cashless economy. What would this mean to monetary and fiscal policy, market structure and our current understanding of economics? More importantly would we need to change our current understanding of capitalism? And if we were to change our perceptions, what would the future version look like?  This book answers these questions, and analyses some of the most pertinent issues of our generation.

 

What You'll Learn

• Examine fractional banking, debt, and the financialization of assets
  
• Gain a firm understanding of the 'too big to fail' theory, smart contracts, and Fintech
  
• Review economics and agent-based modelling
  
• Use the blockchain and complexity economics to rethink economics and capitalistic systems
  

 

Who This Book Is For

The primary audience is bankers and other finance professionals, policy makers, and students of finance and economics. The secondary audience is anyone seeking a deeper understanding of the current financial system, the blockchain, and the future of capitalism.

Praise for The Blockchain Alternative

'...a bold and pioneering effort to make sense of how emerging digital technologies might be used to reshape public policies, including macroeconomic and social policies, in basic ways.  Everyone interested in this very important emerging question should read this book.'

-       Dr. Sanjay G. Reddy, Associate Professor of Economics at The New School for Social Research and Research Associate of the Initiative for Policy Dialogue at Columbia University.

'Writing on blockchain today is analogous to writing about the internet, before it became massively distributed. The book pushes us to think the quantum leap that this technology may infer to our capitalist model, if scaled at the pace described by the book. Written with the support of strong empirical models but also with an open mind towards the future, this is a must read for anyone interested in becoming part of the new economic infrastructure'

-       Dr. Mark Esposito, Harvard University's Division of Continuing Education & Judge Business School, University of Cambridge

'With a rigorously balanced dosage of versatility and rationale we are allured into a multifaceted trajectory across ingrained yet functionally arcane economic models, only to plunge into a conceptually revolutionary realm which irreversibly stimulates us into envisaging a fascinating novel scheme of world order'.       

-       Ioana Surpateanu, Political Adviser to the European Parliament

'If there is only one book that I am reading on how blockchain is going to change our lives, it will have to be 'The Blockchain Alternative.'

-       Dr. Terence Tse, Associate Professor of Finance, ESCP Europe Business School

Kariappa Bheemaiah is a researcher, visiting lecturer, and technology consultant based in Paris. His articles and interviews on the Blockchain and the effects of technological change on society have been published in Harvard Business Review, WIRED magazine and Les Echos, and elsewhere.

Kary is currently the head of research at Uchange, a digital transformation consultancy, a research associate with Cambridge Judge Business School, a visiting lecturer at ESCP Europe and GEM, and a mentor and blogger at StartupBootCamp. Prior to this, he worked as a market intelligence analyst and financial controller in a number of international companies and also as an economic researcher for an EU project.

He is also a public speaker and gave his first TEDx Talk, 'The evolution of currency,' in 2014. He will be giving his second TEDx Talk, 'Rethinking Capitalism with the Blockchain,' in May 2017.

---

Examine what would happen if we were to deploy blockchain technology at the sovereign level and use it to create a decentralized cashless economy. This book explains how finance and economics work today, and how the convergence of various technologies related to the financial sector can help us find solutions to problems, such as excessive debt creation, banks getting too big to fail, and shadow banking. The Blockchain Alternative offers sensible corrections to outdated and incorrect dogmas, such as the efficient markets hypothesis and rational expectations theory. You'll also be introduced to universal basic income, the consequences of going cashless, why complexity economics needs to be understood and what kinds of tools and theories you'll need to redefine the existing definition of capitalism. While the book does discuss technologies and methods that are primed for our future, a number of references are made to economic history and the works ofgreat thinkers from a different era. You'll see how the blockchain can be used to deploy solutions that were devised in the past, but which can serve as the antidote to our current economic malaises. You'll discover that what is required today is not an adaptation of the old theories, but a new methodology that is suited to this new era. Without undertaking such an endeavor, one will always be burdened with a definition of capitalism that is out of kilter with the evolution of our digital humanity. What would this mean to monetary and fiscal policy, market structure and our current understanding of economics? More importantly would we need to change our current understanding of capitalism? And if we were to change our perceptions, what would the future version look like?  This book answers these questions, and analyses some of the most pertinent issues of our generation.   What You'll Learn Examine fractional banking, debt,and the financialization of assetsGain a firm understanding of the "e;too big to fail"e; theory, smart contracts, and FintechReview economics and agent-based modellingUse the blockchain and complexity economics to rethink economics and capitalistic systems  Who This Book Is ForThe primary audience is bankers and other finance professionals, policy makers, and students of finance and economics. The secondary audience is anyone seeking a deeper understanding of the current financial system, the blockchain, and the future of capitalism.Praise for The Blockchain Alternative"e;...a bold and pioneering effort to make sense of how emerging digital technologies might be used to reshape public policies, including macroeconomic and social policies, in basic ways.  Everyone interested in thisvery important emerging question should read this book."e;-       Dr. Sanjay G. Reddy, Associate Professor of Economics at The New School for Social Research and Research Associate of the Initiative for Policy Dialogue at Columbia University."e;Writing on blockchain today is analogous to writing about the internet, before it became massively distributed. The book pushes us to think about the quantum leap that this technology may infer to our capitalist model, if scaled at the pace described by the book. Written with the support of strong empirical models but also with an open mind towards the future, this is a must read for anyone interested in becoming part of the new economic infrastructure"e;-       Dr. Mark Esposito, Harvard University's Division of Continuing Education & Judge Business School, University of Cambridge"e;With a rigorously balanced dosage of versatility and rationale we are allured into a multifaceted trajectory across ingrained yet functionally arcane economic models, only to plunge into a conceptually revolutionary realm which irreversibly stimulates us into envisaging a fascinating novel scheme of world order"e;.       -       Ioana Surpateanu, Political Adviser to the European Parliament"e;If there is only one book that I am reading on how blockchain is going to change our lives, it will have to be "e;The Blockchain Alternative."e;-       Dr. Terence Tse, Associate Professor of Finance, ESCP Europe Business School

Inhalt

Contents at a Glance 5
Contents 6
About the Author 10
About the Technical Reviewer 11
Acknowledgments 12
Introduction 13
Chapter 1: Debt-based Economy: The Intricate Dance of Money and Debt 17
An Obsession with Cash 18
Fractional reserve banking and debt-based money 20
Our Waltz with Debt 26
How much debt is too much debt? 33
Shadow Banking and Systemic Risk 35
Rethinking Debt-based Capitalism 38
Chapter 2: Fragmentation of Finance 41
The Fuzziness of Financialization 41
Financialization and the Innovation of Risk 44
TBTF 46
#Ending TBTF10 49
A new way of looking at fragmentation 57
Sharding 60
Using the Skeleton Keys 76
The Enemy of my Enemy is my Friend 81
Challenges and Solution Pathways 83
Digital Identity and KYC 83
Scalability 97
Chapter 3: Innovating Capitalism 99
Reviewing the Current Definition of Capitalism 99
A Changing Market Structure 108
Lending and Payments 110
Trade Finance 114
Regulating Regulation 121
Accounting Jiggery Pokery 122
Policies for a cashless future 128
Centralized Government Money Issuance and the Cashless Economy 135
Fiat currency on a Blockchain 139
Multiple currencies in a cashless environment 146
One digital money to rule them all—Fiscal Policy instead of Monetary Policy? 152
Helicopter Drops and Universal Basic Income 156
Examples of UBI 162
Alaska 163
Mincome, Canada 163
Otjivero, Namibia 163
Funding the Deployment 164
Making policies based on probabilities 164
Notes 167
CoCo bonds and the Blockchain 167
Scalability 168
Sarbanes-Oxley Act 169
Multiple Currency Mechanisms 169
Chapter 4: Complexity Economics: A New Way to Witness Capitalism 171
Technology and Invention: A Combinatorial Process 172
Economic Entropy versus Economic Equilibrium 179
The Mathematical Wizardry of Equilibrium Economic Models 184
An introduction to Complexity Economics and Agent Based Modelling 198
Dynamics 203
Non - Linearity 203
Power Laws 204
Networks 205
Feedback loops 207
Path Dependence 208
Emergence 208
Agents 209
Complexity Economics Models and Agent Based Computational Economics 212
Designing an ABM Simulation 215
Specifying Agent Behaviour 216
Creating the Environment 217
Enacting Agent Interaction 218
ABCE models in use 220
Kim-Markowitz Portfolio Insurers Model 220
The Santa Fe Artificial Stock Market Model 221
The El Farol Problem and Minority Games 223
Recent developments with ABCE models 227
Putting it all together 230
Conclusion 232
Some Final Notes 233
A brief history of computing 234
Neuroplasticity 236
Types of Macroeconomic Models 237
Appendix A: Bibliography and References 242
Bibliography 242
Chapter 1 242
Chapter 2 244
Chapter 3 247
Chapter 4 250
References 253
Chapter 2 253
Chapter 3 254
Index 255

Produkt-Details

• Erscheint lt. Verlag: 26.2.2017
• Zusatzinfo: XX, 248 p. 29 illus., 24 illus. in color.
• Verlagsort: Berkeley
• Sprache: englisch
• Themenwelt: Mathematik / Informatik ► Informatik ► Datenbanken
• Themenwelt: Mathematik / Informatik ► Mathematik ► Finanz- / Wirtschaftsmathematik
• Themenwelt: Recht / Steuern ► Wirtschaftsrecht
• Themenwelt: Wirtschaft ► Betriebswirtschaft / Management ► Finanzierung
• Themenwelt: Betriebswirtschaft / Management ► Spezielle Betriebswirtschaftslehre ► Bankbetriebslehre
• Themenwelt: Wirtschaft ► Betriebswirtschaft / Management ► Wirtschaftsinformatik
• Schlagworte: Agent based modelling • Banking • Bitcoin • Blockchain • Capitalism • Cashless • Complexity Economics • FinTech • Fractional Banking • Overt Money Finance • Too big to fail
• ISBN-10: 1-4842-2674-7 / 1484226747
• ISBN-13: 978-1-4842-2674-2 / 9781484226742