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Blockchains & Digital Currencies

Descrizione

Prerequisites

A working knowledge of algebra and coding, although no advanced calculus or programming is required.

Objectives

The course aims to forge a solid knowledge of cryptocurrencies and the underlying blockchain technology, from foundations to applications. The student will confront practical explanations and exercises giving them the right perspective to understand and employ this innovation in different business areas, with focus on finance.

Description / Program
The course provides the foundations on blockchain technology, from public protocols such as Bitcoin and Ethereum to enterprise solutions, needed to understand and develop business applications. We explain the transition from traditional monetary systems to digital currencies, the use of smart contracts for financial agreements, the practice of ICOs, the cryptocurrency market,fiscal and legal issues, several use cases.

Learning Method / Style of Lessons

Lessons will be held either with projected slides and on the whiteboard. Few lessons will require an online computer with some software (see below Requested Material).

Compliant with COVID-19 guidelines.

Exam Style

Students will be evaluated based on an in-class final, consisting of theoretical questions and exercises. An optional project work will be proposed to students.

Class participation is a mandatory component of the course grade.

Requested Material

A set of handouts will be delivered.

The students will use Excel and a user friendly open-source GUI for a Blockchain network.

The internet will be used often also during lectures.

Readings/Textbooks

While some readings will be suggested, there is no required textbook for the course.

Program

Lesson 1: Current Monetary and Payment Systems

  • Commercial bank money and deposits. Money creation.
  • Correspondent banking, international payments and SWIFT.
  • Settlement finality, RTGS, Netting, Reconciliation.
  • Central bank money and the TARGET2 example

 

Lesson 2: Introduction to Cryptocurrencies

  • From negative rates to cryptocurrencies
  • The three pillars of a digital monetary system: ledger, transactions, management
  • Basics of Internet Technology, Distributed Databases and Computing
  • Fault-tolerance and Game-theory for Consensus

 

Lesson 3: Foundations of Blockchain Technology

  • Financial cryptography: hashing
  • Asymmetric cryptography and Digital signature
  • A Cryptocurrency transaction
  • Exercises

 

Lesson 4: Understanding Bitcoin

  • Pseudonymity, Scripts, Fees
  • Double-spending risk and Proof of Work
  • Block Structure and the business of Mining
  • Exercises

 

Lesson 5: The Cryptocurrency Market

  • Cryptocurrency time series, investment strategies and funds
  • The different cryptos: Monero, Z-cash, IOTA…
  • New roles for intermediaries: wallets and key management
  • Cryptocurrencies issued by banks (ripple, USC) and Central Banks

 

Lesson 6: Ethereum and Smart Contracts

  • From paper contracts to self-executing code
  • Ethereum accounts and Smart Contracts
  • Potential and risk: The DAO example
  • The creation of Tokens

 

Lesson 7: Hands-on with blockchain and smart contracts

  • Wallets and transactions
  • Blockchain scan
  • Notarization contracts, Tokens and atomic swaps
  • Exercises

 

Lesson 9: Private Blockchains

  • Design and Motivations
  • The private Smart Contracts (R3 CORDA)
  • Bilateral Ledgers: advantages and limitations
  • The JP Morgan Ethereum style. A bridge between public and private.

 

Lesson 10: Business Applications

  • Tokenization and Company’s money
  • IOT and AI applications. Notarization
  • Social and Mutual Networks
  • Supply Chain. Transparency and Quality Assurance

 

Lesson 11: Decentralizing Financial Services

  • ERC token standards for stocks and bonds
  • Decentralized order books and exchanges
  • Transforming Custodians and Depositories
  • Digitalizing Trade Finance

 

Lesson 12: Initial Coin Offerings

  • How they work
  • The different types of tokens
  • Legal and regulatory approaches
  • The Good, the Bad and the Ugly. EOS, TEZOs… the famous ICOs.

 

Lesson 13: Fiscal, Legal, and Regulatory issues

  • The status of cryptos: money? Commodities? Securities?
  • Different approaches for different jurisdictions
  • Regulating tech. Smart Contracts and the Law
  • Cybersecurity

 

Lesson 14: A detailed Case study: advanced financial products

  • The current problems of derivatives and collateral
  • Smart Contracts as a solution to risks and costs
  • Transforming Central Counterparties
  • Data providers and oracle technology

Persone

 

Morini M.

Docente titolare del corso

Informazioni aggiuntive

Semestre
Primaverile
Anno accademico
2021-2022
ECTS
3
Lingua
Inglese
Offerta formativa
Master of Science in Economics in Finance, Corso di base, Digital Finance, 1° anno
Master of Science in Financial Technology and Computing, Corso di base, 1° anno