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Person

Joseph Kachovec

Contributing Author

Joseph Kachovec is a contributing author and former employee of the Federal Reserve Bank of Cleveland.

    • Economic Commentaries

      • Economic Commentary
        Bitcoin’s Decentralized Decision Structure
        Ben R. Craig Joseph Kachovec
        07.16.2019 | EC 2019-12
        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.

        Topics: Cryptocurrencies