COURSE OVERVIEW:
Introduction to Political Economy is a self-contained and nontechnical overview of the intellectual history of political economy, the logic of microeconomics, and the definitions used in macroeconomics. It introduces the notion of a political economy, emphasizing the moral and ethical problems that markets solve, and fail to solve.
LECTURE OVERVIEW:
1. Venezuela as an example: a “shortage” of money?
2. bitcoin: Is a global crypto-currency, has been around since January of 2009. It is not issued by any entity, but rather is peer-to-peer / decentralized. It trades over the internet, or “feature phones.” The protocol is open source. The participants are owners, buyers, and “miners,” or people who transmit and check transactions.
3. The maximum number of Bitcoins will be about 21 million. A bitcoin is a unit of measurement, but the “unit” depends on solely on how people value it in transactions. No physical existence.
4. Five essential steps in a bitcoin transaction:
Step 1: owner of Bitcoins signs in, using public key (or bitcoin Address) a bit like username) and a private key (a bit like password).
Step 2: owner of Bitcoins sends X Bitcoins (highly divisible) to another bitcoin Address.
Step 3: This information is then broadcast by the software on the sender’s phone or PC, and received by all the (active) nodes in the network
Step 4: All the active nodes add the (pending) transaction to the relevant (current) block. A block is like a ledger entry, divided into 10 minute intervals. All the transactions in one 10 minute interval are in the same block (blocks are disjoint: 10:10 to 10:20, 10:20 to 10:30, and so on…)
Step 5: The block is run through a hash function by miners. This is a unique set of characters that contain all the information in the entire block, though knowing the hash won’t let you reproduce the block. Blocks are linked to previous blocks, creating a blockchain. The value of every account is evident on the blockchain.
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Produced by Shaun King, Duke University Department of Political Science Multimedia Specialist