Decentralised Blockchained and Centralised Real-Time Payment Ledgers: Development Trends and Basic Requirements

Abstract

The number of virtual currencies based on blockchain technology grows rapidly, counting more than 400 different schemes today (ECB, 2012, 2015; Raymaekers, 2015). Bitcoin (Bitcoin, 2015) is the largest and most widely known, but it has several competitors such as Ripple (Ripple, 2015), Litecoin (Litecoin, 2015) and Peercoin (Peercoin, 2015) to name a few, and a longer list can be found at Cryptocoincharts (Cryptocoincharts, 2015). The term virtual currencies can be used to cover a larger variety of different Internet payment systems, some of which are not based on blockchain technology, but traditional centralised real-time accounts. PayPal (PayPal, 2015) is probably the best known centralised world-wide Internet payment system. In this chapter the term virtual currency will only cover the subset of virtual currencies which is commonly referred to as cryptocurrencies, that is, those that are based on blockchain technology and decentralised account databases or files. These payment instruments will be compared to traditional payment systems based on centralised account databases. Virtual currencies and blockchain technology have often been greeted as the new technology revolution that will fundamentally change paying in the future (see for example Harvey, 2015), but there are also more critical voices (see for example Tymoigne, 2015).