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Module 1 : Overview, Money and Digital Currency Innovation

 
 
 

Module 1 Description

We explore the notion of Application Programming Interfaces (APIs), with examples. We present the core framework of the course: Traditional dichotomies -- trader / engineer, buy side / sell side, regulated / non-regulated, infrastructure provider / infrastructure user, data provider / data consumer -- are giving way to an ecosystem organized around producers and consumers of Application Programming Interfaces (APIs), We explore the classical definitions and implementations of money, as well as the modern instantiation.

 
 
 

Recorded Lectures

 

Module 1, Chapter 1
Zoom with Transcript / Vimeo

Module 1, Chapter 3
Zoom with Transcript / Vimeo

Module 1, Chapter 2
Vimeo / Link to Kahn Academy

 
 

Explainer Videos

 

What is an API?

Fiat Money and Legal Tender

The History of Money

Bitcoin and the Byzantine Generals Problem

 
 

Study Questions

  1. What does the advent of APIs mean for the future of financial products? Will they become more or less commoditized than they are today? What might be the new factors of competitive differentiation? 

  2. How did the US monetary system grow to be so complex? Of the criticisms listed on page 17 of Marty’s flipped lecture, which do you view to be the most pressing and existential risk and why?  

  3. If you were a senior official of the Federal Reserve, what pain would you be experiencing in the wake of Bitcoin and Libra, and what would you do about it?  How would you respond to Congress’s directive (during the evolving COVID-19 crisis) that the Fed create a digital USD and a digital wallet?  What are the risks to doing nothing -- that is, not making available digital claims on the state and / or central bank as an alternative to physical cash?

  4. What effect might a fully programmable USD have on existing cryptocurrency projects such as Bitcoin? Would it spur or stifle continued innovation?

 
 

Reading List

Required

  1. “Application Programming Interface.” Wikipedia, Wikimedia Foundation.

  2. “The Mythical Man-Month.” Wikipedia, Wikimedia Foundation.

  3. “Federal Reserve Act.” Wikipedia, Wikimedia Foundation.

  4. “History of Money.” Wikipedia, Wikimedia Foundation.

  5. Kaminska, Izabella. “Busting the Myth That Bitcoin Is Actually an Efficient Payment Mechanism.” Financial Times, 13 Dec. 2017 (Available Behind Paywall). 

  6. Black, David B. “Who Needs Cryptocurrency FedCoin When We Already Have A National Digital Currency?” Forbes, Forbes Magazine, 1 Mar. 2020.

  7. “Central Bank Digital Currency: Opportunities, Challenges and Design (Pgs. 6-19).” (PDF) Bankofengland.co.uk, Bank of England, Mar. 2020. 

  8. “The Riksbank's e-Krona Pilot.” (PDF) Sveriges Riksbank, Feb. 2020.

  9. “Technical Solution for the e-Krona Pilot (Skim).” Sveriges Riksbank, 20 Feb. 2020

Optional

  1. Mamoria, Mohit. “WTF Is The Blockchain?” Hackernoon, 28 June 2017.

  2. Custodio, Nik. “Explain Bitcoin Like I'm Five.” FreeCodeCamp.org, FreeCodeCamp.org, 12 Dec. 2013.

  3. Monegro, Joel. “Fat Protocols.” Union Square Ventures, Union Square Ventures, 8 Aug. 2016.

  4. Morehead, Dan. “VC's Missing 97% of the Trade :: Blockchain Letter, November 2017.” Medium, Medium, 2 Nov. 2017.

  5. Dixon, Chris. “Why Decentralization Matters.” Medium, OneZero, 26 Oct. 2018.

  6. Johnson, Steven. “Beyond the Bitcoin Bubble.” The New York Times, The New York Times, 16 Jan. 2018 (Available Behind Paywall).

  7. TechCrunch, director. On Bitcoin and the Blockchain. YouTube, YouTube, 14 Oct. 2016.

  8. Rampell, Alex, director. Decrypting Crypto: From Bitcoin and Blockchain to ICOs. Andreessen Horowitz, 8 Jan. 2018. 

  9. Spiegel, Mark. “Argentina's Currency Crisis: Lessons for Asia.” Federal Reserve Bank of San Francisco, 23 Aug. 2002.

Deep Dive

  1. Brooks, Frederick P., Jr. (1995).  The Mythical Man-Month.

  2. Scheff, Thomas et al. (2006).  Goffman Unbound! A New Paradigm for Social Science (The Sociological Imagination, Paradigm Publishers (ISBN 978-1-59451-196-7)

  3. Earley, J. 1994: Joseph Schumpeter: a frustrated ‘creditist’. In G. Dymski and R. Pollin (eds) 1994: New Perspectives in Monetary Macroeconomics. Ann Arbor: University of Michigan Press.

  4. The Federal Reserve Act of 1913, as outlined on the Federal Reserve’s website.

  5. Lamport, Leslie, et al. The Byzantine Generals Problem. UC Berkeley. SRI International, 1982.

  6. Nakamoto, Satoshi (24 May 2009). "Bitcoin: A Peer-to-Peer Electronic Cash System" (PDF). Archived (PDF) from the original on 20 March 2014. Retrieved 5 March 2014.