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An Economic Analysis of Blockchains

Author

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  • Patrick Waelbroeck

Abstract

The blockchain is a technology that goes beyond timestamping, bitcoin and secure financial transactions. The development of an ecosystem around smart connected objects will probably not happen without the blockchain (in one form or another). The blockchain opens the door to the liquification of the physical world, to the economy of real-time micro-transactions and to smart data sharing. However, it is necessary to distinguish between the different types of blockchains, especially between public and private blockchains, because their economic properties are contrasted. Moreover, governance issues in public blockchains seem to indicate that the technology alone cannot guarantee trust.

Suggested Citation

  • Patrick Waelbroeck, 2018. "An Economic Analysis of Blockchains," CESifo Working Paper Series 6893, CESifo.
    • Handle: RePEc:ces:ceswps:_6893
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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp6893.pdf
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    References listed on IDEAS

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    1. Rainer Böhme & Nicolas Christin & Benjamin Edelman & Tyler Moore, 2015. "Bitcoin: Economics, Technology, and Governance," Journal of Economic Perspectives, American Economic Association, vol. 29(2), pages 213-238, Spring.
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    Cited by:

    1. Pavel Ciaian & d'Artis Kancs & Miroslava Rajcaniova, 2021. "Interdependencies between Mining Costs, Mining Rewards and Blockchain Security," Annals of Economics and Finance, Society for AEF, vol. 22(1), pages 25-62, May.
    2. Plinio Limata, 2020. "Blockchain and Institutions (I): trust and (de)centralization," CERBE Working Papers wpC35, CERBE Center for Relationship Banking and Economics.
    3. Plinio Limata, 2019. "Blockchains’ twilight zones. A reasoned literature review for a critical primer," Econometica Working Papers wp76, Econometica.
    4. Plinio Limata, 2020. "Blockchain and Institutions (II): The Realm of Law," CERBE Working Papers wpC36, CERBE Center for Relationship Banking and Economics.
    5. Pavel Ciaian & d’Artis Kancs & Miroslava Rajcaniova, 2021. "The economic dependency of bitcoin security," Applied Economics, Taylor & Francis Journals, vol. 53(49), pages 5738-5755, October.

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    More about this item

    Keywords

    blockchain; bitcoin; ether; security; payment; governance; trust; oracles; forks; hash; smart contracts; tokens; smart locks; technology diffusion; crypto-currency; financial privacy;
    All these keywords.

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods

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