ENSAE Paris - École d'ingénieurs pour l'économie, la data science, la finance et l'actuariat

Blockchains and Cryptocurrencies (HEC)



Blockchains are distributed ledgers. What does that mean? A ledger records ownership. The first blockchain was created for bitcoin. The blockchain ledger records the ownership of bitcoins. A ledger is distributed if it is maintained, in a decentralized manner, by the community of network participants. Until now, all large and actively used blockchains record ownership of cryptocurrencies.
In this short class, we will tackle two fundamental issues about blockchains:

  • How is it possible for a ledger to be distributed? Nakamoto (2008) offered the first answer to that question. We will discuss and analyze it.
  • What can be the value of a cryptocurrency?

To tackle these two issues, we will describe the workings of blockchains and cryptocurrency markets in practice, and we will use the tools of economics to analyze them.

The first part of the class will be devoted to blockchains. We will show how game theory can be used to analyze blockchain protocols.
The second part of the class will be devoted to cryptocurrencies. We will show how monetary economic theory can be applied to study the function and valuation of cryptocurrencies.

While, during the first and second parts of the class, I will present lectures, the third part of the class will bedevoted to students presentations of research articles (mostly empirical articles) on blockchains and cryptocurrencies.


  1. Blockchain
    1. Proof of work
    2. Proof of stake
    3. Practical Byzantine Fault Tolerant blockchain
    4. Entering the mining industry
  2. Cryptocurrencies
    1. Valuing cryptocurrencies
    2. Student presentations
      • Auer and Claessens (2018)
      • Makarov and Schoar (2018)
      • Liu and Tsyvinski (2018)


Biais Bisière Bouvard Casamatta (2018)
Saleh (2019)
Garatt and Wallace (2018)