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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Bibliographic Details
Published inJournal of institutional economics Vol. 16; no. 4; pp. 433 - 444
Main Authors Luther, William J., Stein Smith, Sean
Format Journal Article
LanguageEnglish
Published Cambridge, UK Cambridge University Press 01.08.2020
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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.
ISSN:1744-1374
1744-1382
DOI:10.1017/S1744137420000107