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Quantum crypto-economics: Blockchain prediction markets for the evolution of quantum technology

Author

Listed:
  • Peter P. Rohde
  • Vijay Mohan
  • Sinclair Davidson
  • Chris Berg
  • Darcy Allen
  • Gavin K. Brennen
  • Jason Potts

Abstract

Two of the most important technological advancements currently underway are the advent of quantum technologies, and the transitioning of global financial systems towards cryptographic assets, notably blockchain-based cryptocurrencies and smart contracts. There is, however, an important interplay between the two, given that, in due course, quantum technology will have the ability to directly compromise the cryptographic foundations of blockchain. We explore this complex interplay by building financial models for quantum failure in various scenarios, including pricing quantum risk premiums. We call this quantum crypto-economics.

Suggested Citation

  • Peter P. Rohde & Vijay Mohan & Sinclair Davidson & Chris Berg & Darcy Allen & Gavin K. Brennen & Jason Potts, 2021. "Quantum crypto-economics: Blockchain prediction markets for the evolution of quantum technology," Papers 2102.00659, arXiv.org.
    • Handle: RePEc:arx:papers:2102.00659
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    File URL: http://arxiv.org/pdf/2102.00659
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    References listed on IDEAS

    as
    1. Chris Berg & Sinclair Davidson & Jason Potts, 2019. "Understanding the Blockchain Economy," Books, Edward Elgar Publishing, number 18636.
    2. Yawitz, Jess B., 1977. "An Analytical Model of Interest Rate Differentials and Different Default Recoveries," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 12(3), pages 481-490, September.
    3. Wilko Bolt & Maarten R.C. Van Oordt, 2020. "On the Value of Virtual Currencies," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 52(4), pages 835-862, June.
    4. Bierman, Harold & Hass, Jerome E., 1975. "An Analytical Model of Bond Risk Differentials," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 10(5), pages 757-773, December.
    5. Divesh Aggarwal & Gavin K. Brennen & Troy Lee & Miklos Santha & Marco Tomamichel, 2017. "Quantum attacks on Bitcoin, and how to protect against them," Papers 1710.10377, arXiv.org.
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