Blockchains as Implementable Mechanisms: Crypto-Ricardian Rent and a Crypto-Coase Theorem
"Blockchains as Implementable Mechanisms: Crypto-Ricardian Rent and a Crypto-Coase Theorem", The Journal of the British Blockchain Association, Volume 1, Issue 2, doi: 10.31585/jbba-1-2-(4)2018
10 Pages Posted: 22 Jun 2018 Last revised: 13 Oct 2018
Date Written: September 28, 2018
We suggest that the promise of blockchains is to be found not merely in the more proximate fact that they are immutable ledgers, but the broader impact that comes from blockchains as a template for mutable design. We discuss mechanism design theory to suggest where blockchains may or may not be seen as implementable mechanisms. We further discuss the idea of defining self-identity as an `elastic asset' using the blockchain in order to generate Ricardian rent from the cryptoeconomy. We suggest how this connection might be exhibited by the Bitcoin blockchain mechanism by discussing the shape of the cryptoeconomy it produces. Finally, we develop an application of the Coase theorem for the cryptoeconomy as a method for analyzing interactions between the traditional economy and the cryptoeconomy.
Keywords: Blockchain, Cryptoeconomics, Mechanism Design, Ricardian Rent, Coase Theorem, Identity, Asset Elasticity
JEL Classification: D02, D86, L22, O30, P4
Suggested Citation: Suggested Citation