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Institutional Cryptoeconomics: Everything You Need to Know about This Blockchain Concept

Summary:
Sam Bocetta in this article: Institutional cryptoeconomics involves the study of institutional outcomes of hard-to-predict cryptographically secure ledgers. It also understands the economy consists of rules, such as laws, property rights, languages, regulations, societal norms, and ideologies. These rules allow opportunistic and dispersed people to coordinate their activities properly, and all while facilitating exchange. Again, we would like to emphasize that this exchange doesn’t have to be restricted to the economy, and can extend to social and political exchanges as well. Economic principles and theories justifying the blockchain and alternative blockchain implementations are the primary focus of cryptoeconomics. Game theory and incentive design are major influencers here since

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Sam Bocetta in this article:

Institutional cryptoeconomics involves the study of institutional outcomes of hard-to-predict cryptographically secure ledgers. It also understands the economy consists of rules, such as laws, property rights, languages, regulations, societal norms, and ideologies.

These rules allow opportunistic and dispersed people to coordinate their activities properly, and all while facilitating exchange. Again, we would like to emphasize that this exchange doesn’t have to be restricted to the economy, and can extend to social and political exchanges as well.

Economic principles and theories justifying the blockchain and alternative blockchain implementations are the primary focus of cryptoeconomics. Game theory and incentive design are major influencers here since they relate to blockchain mechanism design.

Neoclassical and classical economists, on the other hand, understand the purpose of economics as the study of the production and distribution of scarce resources, along with the factors that support the production and distribution of the same resources.

To put things into perspective, institutional cryptoeconomics looks at the institutional economics of the cryptoeconomy and blockchain. While the economy itself is a system to coordinate exchange, institutional cryptoeconomics prioritizes ledgers (which is essentially data structured by rules) over generalized rules. It also deals with the social, political, and economic institutions that were developed to service these ledgers, and the way blockchain changes ledger patterns throughout society.

Hmm..

Amol Agrawal
I am currently pursuing my PhD in economics. I have work-ex of nearly 10 years with most of those years spent figuring economic research in Mumbai’s financial sector.

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