Is Bitcoin a decentralized payment mechanism?
We make a distinction between centralized, decentralized, and distributed payment mechanisms. A centralized payment mechanism processes a transaction using a trusted third party. A decentralized payment mechanism processes a transaction between the parties to the transaction. A distributed payment m...
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Published in | Journal of institutional economics Vol. 16; no. 4; pp. 433 - 444 |
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Main Authors | , |
Format | Journal Article |
Language | English |
Published |
Cambridge, UK
Cambridge University Press
01.08.2020
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Subjects | |
Online Access | Get full text |
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Summary: | We make a distinction between centralized, decentralized, and distributed payment mechanisms. A centralized payment mechanism processes a transaction using a trusted third party. A decentralized payment mechanism processes a transaction between the parties to the transaction. A distributed payment mechanism relies on the network of users to process a transaction on a shared ledger. We maintain that bitcoin is neither a centralized nor a decentralized payment mechanism. It is, instead, a distributed payment mechanism. We then consider decentralized and centralized aspects of the broader bitcoin payment space. |
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ISSN: | 1744-1374 1744-1382 |
DOI: | 10.1017/S1744137420000107 |