Introduction to The Economics of Blockchain and Cryptocurrency

Abstract

Blockchain is an institutional technology. It allows users to create secure, self-administering contracts that coordinate activity among users. Blockchain also includes rule frameworks that are akin constitutions that constrain and enable activity on the blockchain. These frameworks themselves may be subject to alteration according to still some higher level set of rules, and so on. This volume view blockchain not only as a means of supporting monetary transactions, but of developing self-administering ecosystems that, for example, provide transferable property rights, support time separated exchange, and enable governance of resource use by blockchain participants. To the extent that blockchain can be sustainably integrated across these and other domains, this technology can support the opening of new and development of existing domains of economic and social organization through reduction of transaction costs.