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

Blockchains and Cryptocurrencies (HEC)


Blockchains are distributed (decentralized) ledgers. The major, and first, blockchain is Bitcoin, a ledger
used to register ownership of the cryptocurrency. But there are several other blockchains, that can
rely on different protocols. We will describe the main blockchain protocols (involving proof of work
and proof of stake) and, using the tools of game theory, analyze how and if blockchain participants can
achieve consensus. We will also study cryptocurrencies and, using the tools of monetary theory, we
will analyze if and how cryptocurrencies can be useful and valuable.


Key topics include: blockchain, distributed ledgers, protocols, consensus, proof of work, proof of stake,
cryptocurrency valuation.

At the end of the class, students should have understood the workings of blockchain protocols, how
game theory can be used to analyze interaction between participants in blockchains, and what insights
this analysis delivers about the design and prospects of blockchain. Students should also have
understood how classical monetary economics can be used and extended to study cryptocurrencies,
and the insights this delivers into cryptocurrency pricing, volatility and prospects.