Introduction to Institutional Cryptoeconomics

The first use of blockchain was as money and as a store of value, with Bitcoin. Now there are many more applications for this new technology.

 

Ledgers appeared with the invention of writing, the first clay tablets were ledgers. You can make the case that writing was invented for the purpose of keeping track of ownership, taxes and, debt.Blockchain with its unspent transaction outputs is in a sense a ledger, which tells us how many coins are there on any crypto address. Blockchain is a very useful technology that is being used by governments and companies. But it also has the potential to replace firms and governments, because of the decentralized and trustless nature of its ledger.

Institutional Cryptoeconomics studies the institutional consequences of cryptographically secure and trustless ledgers. Institutional Cryptoeconomics studies the impact of the blockchain revolution and can give us a better understanding of where we are going.Blockchain is less than 10 years old, so the best uses of blockchain are yet to be discovered.

Smart contracts are for now the future of blockchain. Smart contracts are used to automatically and securely execute contracts on the blockchain. Smart contracts will eliminate the need for workers that maintain, enforce and confirm the execution of standard contracts(accountants, auditors, lawyers and indeed much of the legal system). A more far reaching application is a cryptobank, a blockchain application that connects borrowers with lenders directly.

 

The Industrial Revolution brought the creation of big centralized companies. The blockchain revolution will create an economy dominated by human capitalism and greater individual autonomy.

 

Tags: , , , , , , , , , ,