Markets for Rules: The Promise and Peril of Blockchain Distributed Governance

Abstract

Purpose: Explore the possible contributions of blockchain technology to creating new governance structures that facilitate social cooperation.

Methodology: Conceptual analysis with key ideas in new institutional economics and political theory.

Findings: Blockchain technology provides a new tool through which political entrepreneurs can credibly alienate some of their power within a system of rules that they have established.

Originality: Links discussion of blockchain entrepreneurship in commercial markets to research into private governance and political thought.

Keywords: Hayek, Buchanan, blockchain, cryptocurrency, bitcoin, private governance, new institutional economics

JEL Classification: B52, B53