Digital Currency: How research from economics, cryptography and computer engineering can help understanding its future real world applications
by Scimson on April 9, 2014 - 11:10pm
I have been writing about many issues related to the technology world. Manly, my articles revolved around the security of specific technology and the future use of certain technologies. The first news that got me interested in digital currencies was the implementation of Bitcoin ATM machines in Montreal. Following my research on that subject I became really interested by the possibilities offered by Bitcoin and other digital currencies. If digital currencies can become big enough to no longer be only an online investment bubble, but also enter the real world through ATM machines, I think they have a future. The second article which pushed my curiosity was the one I wrote about David Chaum, who is considered the father of digital currencies. Chaum’s work greatly improved the security of online transactions through the use of cryptography. After reading Christine Evans-Pughe’s academic article, I was able to better understand the multiple possibilities offered by Bitcoin and similar currencies.
Following these researches, I believe the three academic disciplines which are the most appropriate to research for this topic are economizing, cryptography and computer engineering. First, economics is really important when talking about currencies. Economics is the study of everything that relates to an exchange of worth between entities. Currencies are a way to quantify the worth of goods and services for easier exchange. The future possibilities of digital currencies will certainly have an effect on the world’s economy as it already has. If such a currency were to completely replace our current monetary system, it would definitely have a major financial impact. An economics’ article on the bitcoin would help understand the difference between real currencies and cryptocurrencies. Secondly, the discipline of mathematics is really important mainly for cryptography. Cryptography is the use of mathematics to encode data to prevent unwanted access to the concerned data. Having an entirely digital currency requires an extreme security protocol to prevent theft. The Bitcoin currently has one of the most advanced security system, but to be applied in national and international levels, a digital currency would probably require to be proven totally fail-safe. An article in this discipline could probably explain what is possible with our current knowledge in cryptography. Finally, computer engineering is also really important since cryptocurrencies currently require computing power to verify every transaction. Computer engineering is the conception of computers for specific and general purposes. Bitcoin borrows computing power from its users through a process called mining where users lend their computing power in exchange for coins. However, if governments are to implement a similar system, they will probably want to conserve the current control they have over traditional currencies. There would therefore probably be a need for large computing governmental infrastructures. An article from this discipline would probably explain what would be the requirement of such an infrastructure.