An Economic Appraisal of Blockchain’s Impact on Finance and Market Competition

Abstract

This paper provides an economic appraisal of blockchain technology's impact on the two representative pillars of an economic system: finance and market competition. It is argued that although cryptocurrencies designed upon blockchain technology are perceived as alternative currencies and speculative financial assets today, their roles are limited in the economic sense. However, blockchain technology can promote market competition in the internet sector by the virtue of decentralization. In comparison to the highly concentrated market power of current internet companies, new dynamics of market competition based on Web3 are discussed.