Financial cryptography

Financial cryptography is the use of cryptography in applications in which financial loss could result from subversion of the message system. Financial cryptography is distinguished from traditional cryptography in that for most of recorded history, cryptography has been used almost entirely for military and diplomatic purposes.

Financial cryptography includes the mechanisms and algorithms necessary for the protection of financial transfers, in addition to the creation of new forms of money. Proof of work and various auction protocols fall under the umbrella of Financial cryptography. Hashcash is being used to limit spam.

Financial cryptography has been seen to have a very broad scope of application. Ian Grigg sees financial cryptography in seven layers, being the combination of seven distinct disciplines: cryptography, software engineering, rights, accounting, governance, value, and financial applications. Business failures can often be traced to the absence of one or more of these disciplines, or to poor application of them. This views Financial cryptography as an appropriately cross-discipline subject. Indeed, inevitably so, given that finance and cryptography are each built upon multiple disciplines.^[1]