abstract
- This chapter discusses the intertwined origins of economics and computer science, highlighting the invention of the blockchain by the mysterious Satoshi Nakamoto. The chapter emphasizes the importance of Nakamoto¿s innovation in creating a distributed ledger system, the permissionless blockchain, that requires no trust relationships. The chapter also delves into the economic implications of cryptocurrencies, arguing that tokens are essential to the operation of decentralized systems. The intention is to explore the inner workings of blockchain consensus and to make this literature more accessible to economists. The book focuses on trade-offs, such as security versus speed, and permissioned versus permissionless networks, and examines the incentives behind Proof of Work and Proof of Stake blockchains. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023.