Discovering and Developing the Blockchain Crypto-Economy

By Darcy WE Allen

Abstract: An enquiry into the entrepreneurial development of the crypto-economy: a new decentralised frontier society defined by the potential general purpose technology, blockchain. The process of discovering blockchain governance mechanisms for the crypto-economy is analogous to an economic development problem, requiring non-price coordination of dispersed knowledge about the complementarities of ‘protective-tier’ institutions to govern decentralised exchange. Unlike in the classic case of a developing country with a nation state the crypto-economy has no over-arching sovereign. Therefore, the development of the crypto-economy cannot be governed from the top-down by ‘planners’, and must be privately governed from the bottom-up by entrepreneurs or ‘searchers’. The final part shows this entrepreneurial development and discovery process is occurring in ‘innovation commons’ — including Bitcoin embassies, conferences, hack-a-thons and online collaborative tools — and their polycentricism, heterogeneity, and robustness facilitates the development of the crypto-economy.

Available at SSRN.