Definitions of Cryptoeconomics Part 3 [Extended Defintions]
Expanding on the original definitions. It is time to introduce extended definitions that have been used by several individuals and collected from various papers and websites.
[For the base definitions see: Cryptoeconomics Definitions Part 1 & 2]
Cryptoeconomics Extended Definitions
Institutional Cryptoeconomics – Application of Cryptoeconomics in institutions such as firms and governments.
[Definition is advocated by RMIT]
Non-Bank Financial Systems (NBFS) – Financial frameworks that operate out of the direct control of a country’s central bank and regulators.
Non-Bank Financial Systems has been used to describe the framework which supports Bitcoin and Ethereum. Although each framework is different they operate on the basis of a Blockchain which in turn utilizes cryptography and various tools of different disciplines in order to allow the framework to operate using peer-to-peer (p2p) network. Given current technology in 2017, it would require an alteration of various privacy laws to enable effective jurisdiction and control of Non-Bank Financial Systems. In 2017, the People’s Republic of China has banned the use of Bitcoin and all other Non-Bank Financial Systems (cryptocurrencies) for fear of capital outflows.
Non-Bank Financial Frameworks (NBFF) – See Non-Bank Financial Systems
Shadow Financial Framework – Shares the same definition as Non-Bank Financial Systems and Non-Bank Financial Frameworks
Crypto Microeconomics – Utilizing a bottom-up approach and microeconomic tools, attempts to explain the role of reduction of asymmetric information. Does not replace current economics, rather can be seen as an experimental chapter of microeconomics.
Crypto Macroeconomics – Utilizing a top-down approach of national and global economic variables such as GDP/GNP along with indicators such as housing permits, etc. In an attempt to put together the use of distributed ledger and blockchain across national boundaries and states.
Crypto Econometrics – Not an offshoot of econometrics but rather a term used to describe papers written and data collected to conduct blockchain, open ledger, distributed ledger examined through the lens of game theory and cryptoeconomics. For publishing and submissions.
The author advises against the use of this term as it does not serve an actual purpose.
Proofs (Cryptoeconomics) – A proof in cryptoeconomics draws on the current combined definition in proofs of computer science and math. See Proof-of-work, proof of stake, proof of burn, proof of ownership.
Consensus (Cryptoeconomics) – Also drawn from computer science usage. A consensus occurs when a certain percentage i.e. 80% of all users of an open ledger agrees to execute a certain action. Users must utilize some method to signal their intentions as participants of an open ledger or blockchain.
Signals / Signalling (Cryptoeconomics of Economics/Industrial Organization) – See Job Market by. Signals must be sent out by an individual when employers are unable to differentiate between the various qualities of participants. Employers too can attempt to seek good employees through screening.
In the case of Cryptoeconomics, the purpose is identical. Each individual blockchain or distributed ledger can be designed to receive votes (YES or NO) from participants of the network. The receiving party, which could be a firm, central bank or in 2017 a Foundation dedicated to that ledger or cryptocurrency can act on that result.
It should be noted that there are various other terms that are used to describe Cryptoeconomics.
Cryptoeconomics has been called Cryptonomics, it is not wrong to utilize Crypto-nomics as per Econo-metrics. However it would be correct to address this sub-field as Crypto-Economics as per Macroeconomics and Microeconomics.
Cryptoeconomics too myopic?
It would be partially right to point out the cryptoeconomics as a topic would be heavily myopic. I agree with this as:
Economics of Digitization = Peer-to-peer Distribution (Network Economics / Economics of Information or Economics of digitization) > Distributed Ledger (Distributed Ledger Economics, Open Economics) > Blockchain (Blockchain Economics or Blockonomics)> Crypto-currencies (Cryptoeconomics) > Bitcoin Economics / Ethereum Economics / Litecoin Economics and more generally Cryptocurrency Economics
However, it would not be wrong to start from Cryptoeconomics as practitioners have to actually start somewhere. What is more important is the work and research that is being carried out in this field that is important. Today we remember the Solow Model not because of its name but rather of the long run concept that was introduced to the economics community. That is what is important.
More definitions will be covered in following posts as they adopt wider adoption.