Blockchains: Less Government, More Market

Abstract

In this paper we provide a brief survey of the potential of blockchain technology to propel a process of private entrepreneurial discovery of institutions that challenge state hegemony. Entrepreneurs now have access to new tools to develop decentralised private governance across areas which have traditionally been the domain of government action. This may see a radical reshaping of the boundaries of ‘public’ versus ‘private’. Blockchain may result in less government, and more market based interactions. We introduce institutional cryptoeconomics, and blockchain as a technology which increases the opportunity set of entrepreneurial action. We then survey the potential of blockchain technology to challenge state hegemony in five socioeconomic areas: monetary institutions, the governance of contracting, civil society and social welfare, collective choice and voting, and the verification of identity. We also discuss some challenges and implications of blockchain-based economic infrastructure for public policy and economic regulation. Together these contributions suggest an increasing scope for entrepreneurial action using blockchain that challenges state hegemony, and a necessary shift in the scope of the provision of public goods and government regulatory control.