This thesis explores and analyses the technical and economic factors that determine the potential of blockchain technology for economy and society and their interactions. At the technical level, blockchain technology is portrayed as a combination of different base technologies. It enables new, potentially disruptive applications by providing an efficient technical solution for the fundamental double-spending problem. Based on these findings, blockchain technology is analyzed regarding a new Techno-economic paradigm. However, this does not (yet) appear to be the case, at least from an isolated perspective. From an institutional economics perspective, blockchain technology proves to be a rule-based system and thus a basis for alternative institutions. On the one hand, these enable new forms of economic interaction and coordination and, on the other hand, these are subject to novel governance mechanisms. It turns out that these decentralized blockchain-based forms can lead to higher efficiency in systems that have been dependent on traditional intermediaries up to now due to lower transaction costs. In contrast, there emerge new intermediaries within the blockchain ecosystem, which reminds of traditional schemes.
Table of Contents
1 INTRODUCTION
2 BLOCKCHAIN AS ICT
2.1 BACKGROUND: FROM THE FIFTH TECHNO-ECONOMIC PARADIGM TO BITCOIN
2.2 TECHNICAL ASPECTS OF BLOCKCHAIN
2.3 BLOCKCHAIN APPLICATION TYPES
3 BLOCKCHAIN AS INSTITUTIONAL TECHNOLOGY
3.1 BACKGROUND: NEW INSTITUTIONAL ECONOMICS AND GOVERNANCE
3.2 CRYPTOECONOMICS AND BLOCKCHAIN GOVERNANCE
4 ANALYSES
4.1 USE CASES OF BLOCKCHAIN ON A MACRO LEVEL
4.2 ROLE OF BLOCKCHAIN IN ECONOMY AND SOCIETY
4.3 IMPACT OF BLOCKCHAIN FROM AN INSTITUTIONAL PERSPECTIVE
4.4 ANALYSIS OF INTERMEDIARIES IN THE BLOCKCHAIN ECOSYSTEM
4.5 CHALLENGES AND RISKS
5 CONCLUSION
Research Objectives and Themes
This thesis explores and analyzes the technical and economic factors that determine the potential of blockchain technology for economy and society. The central research objective is to investigate blockchain both as a form of information and communication technology (ICT) and as an institutional technology, addressing its ability to act as an alternative governance system to reduce transaction costs and mitigate intermediary-driven inefficiencies.
- Technical characterization of blockchain technology and its role as a decentralized consensus framework.
- Economic analysis of blockchain within the framework of New Institutional Economics and transaction cost theory.
- Evaluation of blockchain’s potential to serve as an alternative governance institution and its impact on traditional intermediaries.
- Investigation of the challenges, risks, and scalability concerns regarding blockchain adoption.
- Assessment of blockchain's position within the current Techno-economic paradigm versus its potential to initiate a new one.
Excerpt from the Book
Institutions as a governance structure
Within institutions, governance is the superordinate concept for designing conditions for ordered rule and collective action (Stoker, 1998, p.18). It is “drawn from but also beyond government” (ibid.) because it refers to any institution. Williamson is one of the pioneer thinkers of applying the theory of governance to the firm. From an organizational point of view, Williamson describes it as “an exercise in assessing the efficacy of alternative modes (means) of organization. The object is to effect good order through the mechanism of governance. A governance structure is thus usefully thought of as an institutional framework in which the integrity of a transaction, or related set of transactions, is decided.” (Williamson, 1996, p.4). “More generally, the study of governance is concerned with the identification, explication, and mitigation of all forms of contractual hazards.” (Williamson, 1996, p.5).
Importantly, governance differs from regulation. Governance is the “[…] rule-making by the owners or participants of a system with the purpose of safeguarding their private interests […]” (Walport et Al., 2016, p.41), whereas regulation is the “[…] rule-making by an outside authority tasked with representing the interests of the public.” (ibid.p.41). Another comparison is that regulation is about laws designed to control behavior and governance is about “stewardship, collaboration, and incentives to act on common interests.” (Tapscott & Tapscott, 2016). The Internet illustrates this differentiation. ‘Stewardship and collaboration’ are represented by institutions that form specialized networks around their competence.
Summary of Chapters
1 INTRODUCTION: Outlines the disruptive potential of blockchain technology and establishes the research questions regarding its ICT and institutional perspectives.
2 BLOCKCHAIN AS ICT: Examines the foundational technical aspects of blockchain, including its historical emergence, base technologies, and current application categories.
3 BLOCKCHAIN AS INSTITUTIONAL TECHNOLOGY: Analyzes blockchain through the lens of New Institutional Economics, defining it as a rule-based system for governance and coordination.
4 ANALYSES: Compares blockchain with traditional databases, evaluates its role in the current economy, and identifies emerging intermediaries and challenges within the ecosystem.
5 CONCLUSION: Consolidates the research findings, answers the central research questions, and provides an outlook on the future integration of blockchain technology.
Keywords
blockchain technology, blockchain applications, blockchain governance, transaction costs, Techno-economic paradigm, intermediaries, decentralized autonomous organization, new institutional economics, consensus algorithms, smart contracts, digital ledger technology, scalability, regulation, trust, cryptocurrency
Frequently Asked Questions
What is the core focus of this master thesis?
The thesis explores the dual nature of blockchain technology: as an information technology (ICT) providing a technical framework for decentralized data processing, and as an institutional technology that acts as an alternative governance system to facilitate economic interaction.
What are the primary thematic areas covered?
The research covers the technical foundations of blockchain (distributed ledgers, cryptography, consensus), its economic implications (transaction cost theory, governance mechanisms), and its practical application within existing economic and social structures.
What is the central research question?
The study aims to determine the technical and economic factors that constitute the disruptive potential of blockchain technology for the economy and society, while specifically analyzing its efficiency as an alternative institutional framework compared to traditional intermediaries.
Which scientific methods are employed?
The research relies on three primary methods: an extensive review of academic and industry literature (e.g., Tapscott, Williamson, Antonopoulos), Internet-based research, and professional expert opinion from the blockchain industry.
What does the main body of the work address?
The main body investigates the historical development of blockchain, its technical design as a database alternative, its governance models (on-chain vs. off-chain), and its impact on transaction costs, coordination, and the emerging role of new intermediaries.
Which keywords best describe this research?
The work is characterized by terms such as blockchain technology, transaction costs, institutional technology, decentralized governance, Techno-economic paradigm, and intermediaries.
How does blockchain technology differ from traditional databases?
According to the thesis, traditional databases are politically centralized under an administrator who controls access and data manipulation, whereas blockchain is typically a peer-to-peer network where consensus mechanisms ensure that transactions are immutable, irreversible, and verifiable without a central authority.
What role do intermediaries play in the blockchain ecosystem?
While blockchain ideology favors "disintermediation," the thesis identifies that new intermediaries emerge within the ecosystem—such as crypto-exchanges, core developers, and multisignature smart contracts—which provide necessary services but also introduce new points of failure and power concentration.
- Quote paper
- Marcel Kleber (Author), 2019, Blockchain as both ICT and institutional technology, Munich, GRIN Verlag, https://www.grin.com/document/503066
