Blockchains and the economic institutions of capitalism

TLDR

Blockchains are a digital technology that uses peer‑to‑peer computing and cryptography to create an immutable, decentralized public ledger capable of recording money, property titles, identity, contracts, and other data. The authors contend that the economics of blockchains should be viewed as an institutional technology rather than merely a general‑purpose technology with Schumpeterian disruption. They illustrate this by examining multiple examples of blockchain‑based economic coordination and governance. They conclude that blockchains represent an instance of institutional evolution.

Abstract

Abstract Blockchains are a new digital technology that combines peer-to-peer network computing and cryptography to create an immutable decentralised public ledger. Where the ledger records money, a blockchain is a cryptocurrency, such as Bitcoin; but ledger entries can record any data structure, including property titles, identity and certification, contracts, and so on. We argue that the economics of blockchains extend beyond analysis of a new general purpose technology and its disruptive Schumpeterian consequences to the broader idea that blockchains are an institutional technology. We consider several examples of blockchain-based economic coordination and governance. We claim that blockchains are an instance of institutional evolution.