Blockchains Evolving: Institutional and Evolutionary Economics Perspectives

With Brendan Markey-Towler, Mikayla Novak, and Jason Potts

Abstract: In this paper we develop a perspective on systems for interaction organised by Blockchains which makes use of evolutionary-institutional and psychological economics to reveal the process of their origination, diffusion and interaction. We discuss Blockchain and its uses as a distributed ledger technology for the establishment of institutional systems governing socioeconomic interaction. We apply the micro-meso-macro perspective to the origination and diffusion of these systems as meso-rules, and formalise the microfoundations of this process of emergence using psychological and institutional economics. We establish that successful Blockchains will be those which continue to adapt their institutional structure to meet evolving capability requirements and provide complementarities. Our perspective offers valuable insights for designers of Blockchain systems and establishes some of the forms of resistance which might constrain their efforts to diffuse Blockchain technology.

Working paper available at SSRN.