From its very early days, one of the main areas where blockchain enthusiasts argued there was potential for radical innovation was in the ability of the technology to house smart contracts. The Ethereum network was designed with this in mind: to be a distributed ledger with a 'Turing complete' virtual machine on top of it. …
Can the Blockchain make teams work?
Today, in prominent economists doing the blockchain we have Al Roth. According to Bloomberg, he has signed on as an advisor to Covee; a blockchain startup creating a market for knowledge workers. Al Roth had recently said to me that his understanding was that the blockchain would be good for establishing trust but that we …
Selling Predictions on the Blockchain
Numerai is a blockchain startup. with a cryptocurrency boldly named Numeraire. They have just proposed a marketplace for predictions called Erasure. The premise is that there are lots of people out there with some ability -- it may be divine or it may be that they have data and a good statistical model -- to …
Buterin on blockchain transaction fee economics
Vitalik Buterin posted a set of slides from a recent talk he apparently gave on "Transaction Cost Economics." I didn't see the talk but inferred some interesting take-a-ways from the slides that were worth noting. When a transaction is recorded on a blockchain, someone needs to 'process' it. That is done in a decentralised fashion …
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The Paradox of Technological Déjà Vu
Blockchain is one of several technologies du jour. It combines clever methods from peer-to-peer decentralized computing to provide an online tracing function for virtual transactions, and, once someone sets it up, it requires minimal intervention from a central auditor. While Bitcoin is the most well-known application of this innovative computer science, verification of authenticity and …
A limit to Bitcoin scale?
Eric Budish has a new paper out on "The Economic Limits of the Blockchain." He demonstrates a potentially fundamental contradiction at the heart of 'proof of work' schemes to support cryptocurrencies -- the most famous of which is, of course, Bitcoin. It is an incredibly clear issue so I figured I would recount it here. …
Falling Costs: Two Non-Technical Papers
This is just a pointer to two new (non-technical) papers of mine that look at the implications of various falling costs associated with new technologies. The first is a much longer version of the blog post earlier this week on the simple economics of artificial intelligence. "Managing the Machines" co-authored with Ajay Agrawal and Avi …
The Internet of Things, Dangers, Trust and the Blockchain
There is has been a bit of discussion this week regarding The Blockchain. This is the real innovation that powers Bitcoin but one that many see may be a way of generating trust and permissions. Here is a great summary in The Economist. This can be dry stuff -- you know, hard to motivate. But …
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Digitopoly 