Bitcoin, A Novel Economic Institution

ARK Invest is an asset manager that focuses solely on disruptive innovation.

In Part 1 of its Bitcoin investment thesis, the ARK team describes how the evolution of technology and information gave rise to Bitcoin, a novel economic institution designed to challenge legacy financial systems.

The paper explains how legacy financial institutions, which have evolved through a trust-based model, appear to have fallen short of the four economic assurances necessary for a predictable financial system.

The author then goes on to explore four economic assurances that Bitcoin is uniquely positioned to satisfy:

1. The value should be exchanged globally and freely.

2. Wealth should be protected and owned wholly.

3. Rules should be enforced reliably and predictably.

4. The system’s integrity should be verifiable.