Blockchain and Investment: An Austrian Approach

Abstract: Investment is a function of expected profit, which involves calculation of the cost of trust. Blockchain technology is a new institutional technology (Davidson et al 2018) that industrialises trust (Berg et al 2018). We therefore expect that the adoption of blockchain technology into the economy will affect investment and capital structure. Using a broad Austrian economic approach, we examine how blockchain technology will affect the cost of trust, patterns of investment, and economic institutions.

Working paper available at SSRN.

Author(s): Darcy W. E. Allen, Chris Berg, Sinclair Davidson, Jason Potts

Journal: The Review of Austrian Economics

Vol: 34 Year: 2021 Pages: 149–162

DOI: 10.1007/s11138-020-00504-x

Cite: Allen, Darcy W. E., Chris Berg, Sinclair Davidson, and Jason Potts. “Blockchain and Investment: An Austrian Approach.” The Review of Austrian Economics, vol. 34, 2021, pp. 149–162.

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Cryptodemocracy and its institutional possibilities

Abstract: Democracy is an economic problem of choice constrained by transaction costs and information costs. Society must choose between competing institutional frameworks for the conduct of voting and elections. These decisions over the structure of democracy are constrained by the technologies and institutions available. As a governance technology, blockchain reduces the costs of coordinating information and preferences between dispersed people. Blockchain could be applied to the voting and electoral process to form new institutional possibilities in a cryptodemocracy. This paper analyses the potential of a cryptodemocracy using institutional cryptoeconomics and the Institutional Possibility Frontier (IPF). The central claim is that blockchain lowers the social costs of disorder in the democratic process, mainly by incorporating information about preferences through new structures of democratic decision making. We examine one potential new form of democratic institution, quadratic voting, as an example of a new institutional possibility facilitated by blockchain technology.

Author(s): Darcy W. E. Allen, Chris Berg, Aaron M. Lane, Jason Potts

Journal: Review of Austrian Economics

Year: 2018

DOI: 10.1007/s11138-018-0423-6

Cite: Allen, Darcy W. E., Chris Berg, Aaron M. Lane, and Jason Potts. “Cryptodemocracy and its Institutional Possibilities.” Review of Austrian Economics, 2018.

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