Fintech: Cryptocurrency, blockchain and cash in the future

Whenever a disruptive technology appears in some particular part of the economy there are almost inevitably immediate winners and losers from the resulting change in the economic climate. We illustrate that the new technologies that enable distributed electronic transmission of financial value (such as a cryptocurrency like bitcoin) are a different type of disruptive technologies that not only provide combinatorial innovation but also change the very rules of the market by self- writing them and thus by self-deregulating themselves. We argue that there is a need to both disentangle and reintegrate hese concepts to appropriately model the impacts of these new technologies, given their role as both a `product’ and a `legal framework’ for the creation, management and destruction of quasi firm-like entities. This is the first research of its type to synthesize these areas. The underpinning technologies that drive this new medium are distributed ledger technologies (DLTs for short), block-chains and cryptocurrencies. DLTs are databases that are distributed across a large number of computing nodes in some form of network. The interesting feature of a DLT is that no one component of the network controls the overall information on the DLT, but can dynamically query it. This technology allows a ledger to be maintained that tracks transactions and attempts to ensure that no (small) group of individuals can subvert the ledgers’ integrity.

Dr Karen Elliott is a Lecturer in Enterprise and Innovation in Newcastle University Business School, Newcastle, UK and Senior Associate to Bardd Partnership Consultancy. Karen’s research interests include organizational and behavioural change, disruptive innovation, blockchains, cryptocurrencies, trust and cyber security. Prior to joining Newcastle and Durham Universities, she worked as a project, change, and programme manager (public, private, and voluntary sectors).