Digital trade coin: towards a more stable digital currency. Issue 7 (18th July 2018)

• Record Type: Journal Article
• Authors: Lipton, Alex; Hardjono, Thomas; Pentland, Alex
• Is Part Of: Royal Society open science. Volume 5:Issue 7(2018)
• Publication Date: 2018-07-18
• Subjects: blockchain technology -- digital currency -- electronic cash; Science -- Periodicals; 500
• DOI: 10.1098/rsos.180155
• Languages: English
• ISSNs: 2054-5703

Abstract

Abstract : We study the evolution of ideas related to creation of asset-backed currencies over the last 200 years and argue that recent developments related to distributed ledger technologies and blockchains give asset-backed currencies a new lease of life. We propose a practical mechanism combining novel technological breakthroughs with well-established hedging techniques for building an asset-backed transactional oriented cryptocurrency, which we call the digital trade coin (DTC). We show that in its mature state, the DTC can serve as a much-needed counterpoint to fiat reserve currencies of today.