Beyond Cryptocurrencies: Economic and Legal Facets of the Disruptive Potential of Blockchain Technology

• Author: Daj A.
• Position: Transilvania University of Brasov
• Pages: 207-216

Bulletin of the Transilvania University of Braşo v

Series V: Economic Sciences • Vol. 11 (60) No. 2 – 2018

BEYOND CRYPTOCURRENCIES: ECONOMIC AND

LEGAL FACETS OF THE DISRUPTIVE POTENTIAL

OF BLOCKCHAIN TECHNOLOGY

Alexis DAJ1

Abstract: While the most prominent applications are represented by

virtual currencies (especially Bitcoin) and other financial technology solutions

(FinTech), blockchain technology is a powerful new tool that has significant

disruptive potential - bo th from economic and legal perspective. Not only

private investors, but also governmental institutions focus their attention on

this complex distributed ledger technology which is seen as a ground-

breaking solution for long-standing problems in traditional highly centralised

systems belonging to the public and private sector. However, blockchain

technology faces some important challenges – mainly regarding scalability,

privacy, regulatory uncertainties, business models and standardisation.

Key words: Blockchain Technology, FinTech, Distributed Ledger

Technology, Smart Contracts, Blockchain Regulation.

1. Introduction

The hype around crypto currencies like Bitcoin has somewhat faded in the aftermath

of the latest significant value fluctuations of the most popular virtual currencies and the

enforcement of new regulatory measures - therefore, the question arises: what will

happen in the future with these new technologies?

The core technologies behind virtual currencies like Bitc oin and FinTech Solutions can

be grouped under the concept of blockchain-based Distri buted Ledger Technology

(DLT).

Satoshi Nakamoto, the creator of Bitcoin, explained the technology in his 2008 whit e

paper “Bitcoin: A Peer-to-Peer Electronic Cash System” as an “electronic payment

system based on cryptographic proof instead of trust, allowing any two willing parties to

transact directly with each other without the need for a trusted third party. Transactions

that are computationally impractical to reverse would protect sellers from fraud, and

routine escrow mechanisms could easily be impleme nted to protect buyers”.

(Nakamoto, 2008)

According to the World Bank 2017 DLT report, although initially merely seen as the

1 Transilvania University of Braşov, alexis.daj@unitbv.ro