Antitrust and Costless Verification: An Optimistic and a Pessimistic View of the Implications of Blockchain Technology

Abstract

Blockchain technology allows a network of individuals, institutions or devices to coordinate economic activity on a global scale ('internet-level consensus') without assigning the same degree of control to the intermediary operating and facilitating transactions in the marketplace. This allows for the creation of new types of decentralized digital platforms where the benefits of network effects are separated from the traditional costs they entail in terms of market power. We discuss both the opportunities and challenges the technology involves from an antitrust perspective, and in particular how it can be used to facilitate the creation of extremely efficient and competitive digital markets, as well as to facilitate collusion and make antitrust enforcement more difficult.

Keywords: blockchain, antitrust, cryptocurrencies, network effects, market power