Cryptoeconomic approaches combine cryptography and economics to create robust decentralized P2P networks that thrive over time despite adversaries attempting to disrupt them. The cryptography underlying these systems is what makes the peer-to-peer (P2P) communication within the networks secure, and the economics is what incentivizes all actors to contribute to the network so that it continues to develop over time.
Bitcoin is was the first P2P network to introduce economic incentives in the form of bitcoin tokens/coins. In a crypto economic setup, financial incentives are designed to be fault tolerant, attack and collude resistant. These incentives are tied to a token. The design of the token defines the rules of the network.
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