Barter Trade and Reallocation System and the New Blockchain Distributed Digital Technology
11 Pages Posted: 26 Nov 2018
Date Written: November 11, 2018
The new blockchain distributed digital technology has the potential to make a transformational change in the way that people transact in the market; a change that is welfare maximizing. The potential transformation was demonstrated in the first time when Satoshi Nakamato came out with the Bitcoin. The new technology heralded by the Bitcoin makes it possible to make the exchange economy with competitive equilibrium that is the heart of the neoclassical economic model a blueprint for operating market. The neoclassical exchange economy model is a self-organization and it is decentralized. A necessary condition for the operations of the model is an efficient decentralized trade and reallocation system. It is shown in the paper that such a trade and reallocation system should be also a self-organization with no central control where chains of pairwise transactions emerge from simple tasks by individual components of the system.
Keywords: blockchains, distributed decentralized technology, exchange economy
JEL Classification: E
Suggested Citation: Suggested Citation