Introduction

This chapter introduces the methodology that shapes our discussion. We start with the short history of Bitcoin and its followers as digital information transfer mechanisms. The monetary status of such coins is given a preliminary discussion in terms of social credit balances and the ideal pure credit economy. The basic one-shot simultaneous mining game is introduced in its qualitative features. The pattern of cost competitiveness shapes the pattern of strategic entry. Other incentives are briefly discussed, in particular, the incentives to start attacks. Our methodological stance emerges in connection with the specificity of the incentive mechanism generated by the Nakamoto design, that economists are required to stylize in its essence; Leshno and Strack provide a paradigmatic example of such an approach. The monetary problem of the 2020s is given a preliminary glimpse, with due emphasis on the role of central banks in coordinating financial markets and managing the supply of liquidity therein, in connection with the “phase transition” generated by the unconventional monetary policies of the 2010s.