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Bitcoin’s Decentralized Decision Structure

Author

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  • Ben R. Craig
  • Joseph Kachovec

Abstract

With the introduction of bitcoin, the world got not just a new currency, it also got evidence that a decentralized control structure could work in practice for institutional governance. This Commentary discusses the advantages and disadvantages of centralized and decentralized control structures by examining the features of the bitcoin payment system. We show that while the decentralized nature of the Bitcoin network \\"democratizes\\" payments, it is not obvious that the approach increases the equity or efficiency of markets or that the costs of the decentralized control structure won?t outweigh the benefits in the long run.

Suggested Citation

  • Ben R. Craig & Joseph Kachovec, 2019. "Bitcoin’s Decentralized Decision Structure," Economic Commentary, Federal Reserve Bank of Cleveland, issue July.
  • Handle: RePEc:fip:fedcec:00104
    DOI: 10.26509/frbc-ec-201912
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    Keywords

    cypto currency;

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