Programme PGP Term V Academic Year 2021-22

Course title Bitcoin and the Blockchain Area Finance and Accounting Credits 0.50

Prof. Jayanth R Varma

Course Description & Objectives
In 2008, the pseudonymous computer scientist Satoshi Nakamoto introduced a cryptographic currency called the Bitcoin based on a novel decentralized ledger called the blockchain. While Bitcoin as a currency has had its ups and downs, there is growing interest in the decentralized ledger (the blockchain). The blockchain has potential applications in many different areas of finance which have traditionally used a centralized ledger maintained by a trusted party.

Banks, exchanges, depositories, central banks and regulators are all exploring potential applications of the blockchain to reduce costs, increase robustness and shorten settlement delays. Many blockchain com- panies have been set up to provide services and support for these applications. Meanwhile, decentralized finance (DeFi) has also emerged as an important innovation in the financial services industry.

The course is intended to cover:
• The cryptographic foundations of the blockchain and related technologies
• The role of the ledger in payment systems, clearing and settlement systems, and the inefficiencies associated with the traditional centralized ledger
• The benefits of smart contracts, and the role of the blockchain in making these contracts possible.
• The most important applications of the blockchain and smart contracts.

The course is oriented towards finance professionals who need to understand the strategic implications of the blockchain in their respective fields. While a high level understanding the cryptographic foundations is essential for this purpose, the course is not focused on the mathematical and technical aspects of the cryptography.

Though the course is more about the blockchain than on Bitcoin, it devotes a few sessions to the design of a couple of leading crypocurrencies. Apart from being the first application of the blockchain, crypocurrencies even now remain its most important exemplars. The course will not however attempt to analyse cryptocurrencies as an investment.