Some Simple Economics of the Blockchain

  title={Some Simple Economics of the Blockchain},
  author={Christian Catalini and J. Gans},
  journal={International Political Economy: Monetary Relations eJournal},
  • Christian Catalini, J. Gans
  • Published 2016
  • Business
  • International Political Economy: Monetary Relations eJournal
  • We build on economic theory to discuss how blockchain technology can shape innovation and competition in digital platforms. We identify two key costs affected by the technology: the cost of verification and the cost of networking. The cost of verification relates to the ability to cheaply verify state, including information about past transactions and their attributes, and current ownership in a native digital asset. The cost of networking, instead, relates to the ability to bootstrap and… CONTINUE READING
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