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From YouTube: Agoric + Protocol Labs // Economics of Blockchain - Professor Jason Potts & Dr Chris Berg
Description
Professor Jason Potts and Doctor Chris Berg discuss the economics of blockchain and the blockchain economy.
A
Jason
Potts
I
think
directed
about
trade
innovation
hub,
which
was
the
world's
first
social
science
research
institutions,
block
angle,
to
start
in
2017
and
we're
a
bunch
of
economists,
very
interest
in
how
this
new
technology
15
or
so
minutes.
It
is
the
question:
what
are
the
fundamental
economics
acid,
underneath
blockchain
and
the
relay
integration?
What
then,
does
a
blockchain
economy
actually
look
like?
These
are
two
fundamental
questions:
what
are
the
economics
of
loitering?
How
does
the
economy
work
want.
B
A
A
The
way
which
this
is
currently
done
and
a
lot
of
the
sort
of
talk
we
here
at
wanders
around
this
concept
of
crypto
economics,
crypto
economics,
is
essentially
the
study
of
mechanism,
design
and
game
theory
applied
to
a
particular
blockchain,
a
particular
set
of
incentives
in
time,
and
then
we
can
use
economics
to
study
how
we
design
incentives
to
achieve
particular
outcomes
in
any
particular
system.
That's
crypto
economics
we
want
to
go
to
beyond
that
turns
out
that
that's
that's
that's
awaiting,
but
it's
just
addresses
one
blockchain,
one
particular
system.
A
We
are
actually
interested
in
it's
not
just
one
particular
system,
but
all
of
the
systems
that
come
together
to
create
an
economy.
So
we
want
to
want
to
try
and
use
a
different
type
of
economics
other
than
just
using
game
theory
mechanisms
I
have
to
understand
the
blockchain
economy,
and
for
that,
what
we
use
is
institutional
economics.
This
is
a
branch
of
economics
that
is
based
around
the
work
of
Ronald
Coase
Oliver
Williams
in
Elinor
Ostrom
Oliver
house,
Nobel
Prizes,
for
this
work.
It's.
A
Very
strongly,
with
a
few
other
areas
in
economics
called
evolutionary
economics,
which
is
the
study
of
of
an
economic
system
as
an
evolving
complex
system
of
rules
and
technologies.
It's
a
study
on
constitutional
economics,
which
is
the
study
of
an
economic
system
from
the
perspective
of
constitutional
rules
that
underpin
the
foundations
of
an
economic
system.
A
It's
associated
with
the
work
of
James
began
its
associated
public
choice,
economics,
which
is
the
study
of
the
economic
study
of
government
of
government
and
fundamentally
of
Austrian
economics,
which
is
the
study
of
the
economy
as
a
decentralized
system
of
knowledge
and
information,
and
essentially
trying
to
resolve
a
coordination
problem.
So
the
key
insights
that
we
have
you
know
it's
to
study.
How
do
we
study
the
economics
of
blockchain
and
a
blockchain
economy?
A
Is
that
we
need
a
new
type
of
economics,
which
is
this
hybrid
of
new
institutional
economics
plus
Austrian,
plus
public
choice,
plus
Constitution
plus
evolutionary?
What
all
of
this
is
doing
is
it's
bringing
together
a
perspective
of
a
fundamental
perspective
on
the
coordination
problem?
Learning
on
and
different
approaches
to
economics
view
this
a
bit
differently,
so
the
classical
economists
of
Adam,
Smith
and
David,
Ricardo
and
so
on.
When
they
look
to
study
an
economy,
the
industrial
economy
offensive
17th,
18th
19th
century.
A
What
they
were
looking
at
were
factors
of
production,
land,
labor
and
capital,
and
they
wanted
to
understand
how
those
factors
of
production
came
together
to
create
the
production
of
wealth
and
the
distribution
of
wealth.
Resources
is
what
they
saw.
Modern
economics
that
have
shifted
from
there
to
emphasize
the
fundamental
markets
in
the
process
of
allocating
these
resources
through
an
economy
and
using
the
price
mechanism.
A
There's
a
way
to
understand
that,
so
we
go
classical
to
neoclassical
economics
when
we
go
from
the
resource
planning
problem
to
a
market
coordination
problem,
that's
more
or
less
the
model
maker,
it's
up
until
the
mid
century.
There
are
new
institutional
economics,
the
police
of
a
long
history,
but
it's
really
only
come
come
to
fruition
in
the
past
two
three
or
four
decades,
and
what
new
institutional
economics
introduced
was
a
focus
on
roads
on
rural
systems,
and
this
was
a
study
of
an
economy
as
being
made
of
institutional
worlds,
habits
and
routines
of
people.
A
Institutional
crypto
economics,
which
is
what
we
believe
the
next
phase
of
economics.
Is
it's
basically
going
underneath
that
again
to
the
level
of
Ledger's
and
where
the
ledger
is,
is
a
recording
of
social
facts
and
the
social
facts
about
things
like
identity.
Who
is
that
person
like
property
who
owns
that
car
things
like
contracts?
What
is
the
what
what
promises
have
been
made
between
these
people
with
respect
to
this
property?
A
So
what
we
have
there
is
a
ever
deepening
of
the
understanding
of
an
economic
system
that
goes
from
an
economy
of
things,
to
a
nepali
of
markets
from
the
company
of
rules
to
an
economy
in
social
facts,
and
that's
what
the
blockchain
revolution
it's
in
the
sense
of.
Why
is
this
technology
so
important
to
understanding
an
economy?
It
is
it's
a
fundamental
shift
in
the
very
way
in
which
we
record
facts
into
subjective
facts
that
create
property
and
titles
and
contracting
and
identity,
and
so
on
within
do
institutions
out
of
that.
A
That's
the
institutional
layer
within
the
market
systems
on
which
then
creates
resource
systems.
So
this
is
a
this
is
not
just
a
new
technology
like
lasers
or
3d
printing
being
dropped
into
an
economy.
This
is
a
fundamental
constitutional
shift
in
how
economies
work
and
it
actually
requires
a
new
type
of
economics.
To
do
this,
that's
what
we're
trying
to
build
here.
So
this
institutional,
quick
directive
on
this
is
the
new
you
feel
now,
we've
written
about
this
in
journal
articles
and
medium
post,
a
book
coming
out
on
this
in
a
few
months.
A
Time
called
how
to
understand
the
blockchain
with
the
economy,
but
what
this
really
is
is
institutional
economics
is
the
study
of
distributed
rural
systems
in
the
economy?
Plus
this
new
technology
for
our
recording
fact
and
time
is
institutionalized.
So
the
basic
insight
of
institutional
economics
of
people
like
that
was
northland
and
Oliver
Williamson
inside
was
fundamentally
Ronald.
A
Coase
was
that
when
transactions
costs
change,
when
the
costs
of
doing
things
in
a
market
change,
what
we
expect
as
theme
structure,
the
organizational
structure
than
economy
will
change
transactions,
costumes
economies,
look
different
more
things
take
place
in
markets.
Fewer
things
take
place
in
high.
Rapid
economies
evolve
structurally.
When
transactions
cost
change.
What
does
blockchain
do
it
changes
the
cost
of
trust?
Then
it's
the
same
insight
when
the
cost
of
trust
changes.
A
What
we
expect
is
that,
if
you're,
not
an
organization
where
things
take
place,
the
way
in
which
we
govern,
if
you're
not
like
activity,
whether
it's
in
France
markets
of
Iraqis
will
shift.
So
that's
the
sort
of
core
insight
that
we
see
them
institutional
crypto
economics
is
revealing.
Is
this
notion
that
this
new
technology
has
come
in
is
shifted?
A
The
cost
of
trust
than
their
cost
of
trust
will
cause
structural
change
in
organization
before
2009
there
were
basically
three
ways
in
which
all
economic
activities,
three
governance-
mechanisms
which
are
all
economic
activity,
took
place
either
took
place
in
a
firm
in
a
market
or
an
egg.
Two
of
those
are
hierarchies.
Governments
and
firms
are
hierarchical
form,
so
we
either
had
market
organization
or
hierarchical
organization
and
everything
in
an
economy.
A
All
value
creation
processes
were
in
some
way
organized
and
that's
in
their
sense,
since
2009
there's
a
there's,
a
new
type
of
economic
organizational
technology
block
chains-
and
this
is
how
we
have
si
si
economies
going
forward-
is
that
some
of
the
activity
that
used
to
take
place
in
hierarchies
will
move
to
block
chains.
Some
that
used
to
take
place
in
markets
will
move
there
and
some
new
things
that
were
previously
not
done
just
simply
because
they
were
to
transactions.
Costs
were
too
high,
we'll
move
into
the
economy.
A
So
it's
a
structural
change
in
the
economy
and
not
just
simply
a
productivity
revolution.
That's
washing
through
all
right
cost
of
trust,
and
that's
the
key
economic
insight
here
in
terms
of
the
economics
of
blockchain,
is
it's
an
economics
of
the
cost
of
trust
and
what
we
mean
by
this
is
in
the
same
way
that
transactions
costs
are
the
costs
of
writing
contracts
and
monitoring,
and
so
on.
The
cost
of
trust
is
significantly
overlaps
with
that,
but
it's
the
cost
of
establishing
relationships.
It's
the
cost
of
monitoring
and
auditing.
A
That
is
basically
checking
each
other's
work.
It's
the
cost
of
verifying
that
things
are
true,
looking
up
records
and
so
on.
It's
all
of
the
costs
that
would
not
exist
in
a
world
in
which
everyone
only
ever
spoke,
the
truth
and
all
people
and
all
promises
were
true,
and
in
a
world
where
there
were
only
true
statements
uttered
and-
and
everything
could
be
done
completely
truthfully
and
honestly,
what
we
have
is
we
wouldn't
have
contracts
in
an
economy
we
wouldn't
have
hierarchies.
A
All
we
would
have
is
I
promise
to
do
that,
good,
it
will
be
done.
There's
no
need
for
us
to
involve
monitoring
agency
management
lawyers
regulation.
None
of
those
things
are
necessary.
That's
what
we
mean
by
the
cost
of
trust
is
all
of
the
things
that
we
need
to
do
in
order
to
create
because
value
is
created
through
trade
and
interaction.
But
we
need
things
to
be
true.
I
need
to
know
that
you
are
the
person
who's
allowed
to
do
that.
A
The
claims
you're
making
a
true
so
costs
of
trust
include
transactions
cost,
but
they
go
beyond
that.
So
that's
what
we
that's,
that
the
the
these
are
the
institutions
that
are
being
disrupted
by
this
technology.
Now.
What
is
that
cost
of
trust
turned
out?
No
one
had
ever
bothered
to
measure
it
before,
because
we've
never
had
an
alternative
technology
I.
What
else
are
you
going
to
use
other
than
firms,
markets
and
governments
right?
So
we
published
a
paper
in
this.
A
Is
the
journal
British
the
journal,
British
blockchain
Association,
just
a
few
months
ago
we
went
through
and
we
went
through
the
entire
US
labor
force
data.
We
classified
every
job
classification
we
estimated
the
fraction
of
it
that
was
devoted
to
trust
we
added
all
up
on
the
labor
force
side
and
estimated
what
fraction
of
the
US
census
data
is
devoted
to
trust,
and
we
had
no
idea.
That
number
was
that
big.
Our
initial
estimates
were
not
an
order
of
magnitude
less,
but
a
lot
less.
A
We
need
to
do
this
number
again
on
an
expenditure
side
in
the
dirt
again,
just
to
there's
a
few
ways
we
can.
We
can
check
this
independently,
but
what
that
tells
you
is
one
in
every
three
people,
their
entire
life
I,
the
economic
value,
they're
contributing,
is
just
doing
checking
everyone
else's
work.
Now,
that's
necessary
economies
do
not
function
without
this
is
the
more
complex
an
economy.
The
higher
that
number
will
be
because
there'll
be
more
specialization,
division
of
labor,
so
the
the
more
globalized
and
complex
and
economy
is.
A
We
can
the
large
leaders,
which
means
that
number
is
going
up
as
well
and
that
doesn't
produce
wealth
it
produce
it's
an
input
into
the
condition
of
producing
wealth.
You
can
do
a
little
back-of-the-envelope
calculation
and
go
that's
30
trillion
dollars
worldwide
right
now.
That's
how
much
we're
spending
on
the
cost
of
trust.
A
So
that's
that's
why
this
matters
is
why
a
technology
that
fundamentally
disrupts
the
cost
of
trust
is
a
global
economy
shaking
technology
alright,
and
what
how
does
it
specifically
disrupt
so
we've
been
you
working
through
the
work
of
Oliver
Williamson
in
this
is
one
of
the
key
economists
to
sort
of
shape.
How
we're
thinking
about
this,
what
cost
of
trust
I
mean?
What
blockchain
does
is
that
it
enables
us
to
use
promise
instead
of
contract
or
enables
us
to
you
to
four
contracts
to
work
a
lot
more
efficiently
without
monitoring
and
auditing.
A
So
it
enables
us
to
use
one
governance
mechanism
promises
in
contracts
rather
than
another
governance
mechanism,
hierarchies
and
and
and
and
and
other
such
thing.
So
what
this
basically
predicts
is
that
blockchain
technology
overcomes
what
Oliver,
Williamson
called
opportunism
opportunism
is
the
ability
for
you
to
create
value
for
yourself
by
the
fact
that
I
have
to
monitor
your
actions
or
it
just
it's
not
so
much
cheating's
on
it.
A
It's
just
ability
for
one
party
in
a
contract
to
gain
benefit
over
the
other
party
to
a
contract,
unless
the
other
party
uses
resources
to
stop
the
other
one
doing
that
opportunity
right
this
blockchain.
Do
it
limits
opportunism
by
taking
it
very
simply
taking
it
and
reducing
me
at
this
space
in
which
you
can
potentially
do
that?
A
What
does
that
look
like?
So
our
analysis
of
this
there's,
this
notion
of
cost
of
trust
and
and
and
and
and
promises
not
hierarchies,
is,
is
the
first
sort
of
key
inside
and
depth.
The
safety
inside
is
where
that
takes
you.
If
that's
what
this
technology
is
doing,
it's
taking
opportunism
off
the
table,
its
enabling
us
to
make
promises
and
those
promises
being
automatically
executable,
which
means
I,
don't
have
to
consume
resources,
monitoring
and
auditing,
and
so
on
your
behavior.
What
what
does
it
do?
A
What
this
looks
like
is
the
economics
of
a
3-sided
market
at
the
war,
a
multi-sided
market,
otherwise
known
as
a
platform,
and
what
a
platform
is.
So
you
know
things
like
visa
networks,
and
so
on
are
platforms
in
that,
in
the
sense
they
bring
two
parties
together
in
such
a
way
that
a
third
party
consumes
resources
or
provides
resources
to
enable
two
other
parties
to
trade.
It's
whether
that's,
google,
enabling
people
to
find
information
about
each
other,
whether
it's
visa,
enabling
merchants
and
consumers
to
trade.
A
What
is
here
is
that
a
miner
or
whoever
is
providing
the
proof
of
work
or
the
end
lines
of
trust
mechanism
is
consuming
resources,
burning
resources
to
enable
two
other
parties
to
lower
their
costs
of
trusting
each
other
right.
That's
that's
what
this
is
doing.
It's
a
platform
technology
in
that,
in
that
literal
sense,
lowering
the
cost
of
trust,
thus
creating
a
platform.
Now.
What
is
that?
That's
what
it
means
to
industrialize
Trust.
We
one
party
burns
electricity
to
enable
two
other
parties
to
trade
without
opportunism.
A
We
just
industrialized
trust,
that's
not
figuratively,
literally
what
we
just
did.
So
that's
the
economics
of
blockchain.
It's
it's
an
industrial!
It's
it's
the
next
step
in
the
industrialization
process,
but
it's
industrializing,
something
that
we've
never
been
able
to
industrialize
before,
to
lower
the
cost
of
opportunity,
take
opportunism
off
the
table
and
then
and
thus
lower
the
cost
of
of
contracting
all
right.
So
this
this
then
becomes
their
way
of
understanding
the
economics
of
blockchain,
the
economic
sort
of
what
a
blockchain
economy
will
look
like.
Is
it
looked
contractually
very
different
in
organizationally
very
different?
A
This
is
the
rise
of
platforms
and
this
or
basically
protocol
based
platforms,
which
are
industrializing
trusts
to
enable
promises
to
be
made
between
parties
without
having
to
go
via
hierarchy.
Organizations
now
is
this
sometimes
referred
to
as
disintermediation
and
that's
sort
of
true,
it's
just
as
accurate
to
call
that
d,
hierarchical,
ization
you're,
taking
a
governance
mechanism
out
of
the
equation,
replacing
it
with
the
ability
of
peer
to
vehicle
promises
to
work
in
in
contracting.
So
that's
the
the
way
in
which
we
see
the
well
it
happens
here
now.
I
haven't
really
touched
on
the.
A
What
that
then
does
to
information
in
the
distribution
of
information,
but
it
massively
powers
it
up,
but
it
enables
local
information
to
work
so
much
better
in
this
context.
Right
so
there's
a
few
things.
We
can
call
that
we
can
think
of
that
as
digital
infrastructure
and
industries
utilities.
That
say
it's
a
platform,
but
that's
where
this
goes,
and
that
was
why
this
initial
understanding
of
crypto
economics
is
mechanism.
A
Design
on
a
blockchain
is
correct,
but
it
misses
the
big
point,
which
is
what
this
does
to
industrialize
trust
and
and
as
as
platforms
and
protocols
alright,
and
what
the
one
implication
of
this.
So
that's
the
that's
the
underlying
economics.
It's
just
it's.
It's
reduces
the
cost
of
trust
and
industrialize
distrust
enabling
promises
to
work,
overcoming
opportunism.
So
what
well?
First,
the
first
thing
that's
does.
Is
it
completely
changes
the
way
global
supply
chains,
work
and
we're
sort
of
starting
to
see
a
lot
of
this
emerge
already?
A
So
we
call
these
reform
networks
as
a
way
to
distinguish
the
rise
of
sort
of
sort
of
chandalier,
ian
multiform,
large
hierarchy
that
we
saw
through
the
20th
century.
What
we
predict
is
basically
adi
hierarchical,
ization
process
that
will
unfold
both
reducing
the
value
of
large
hierarchical
organizations
over
supply
chains,
but
also
reducing
the
value
of
branding
and
other
mechanisms
that
you
use
for
trust.
So
there's
a
few
sort
of
big
obvious
predictions
that
come
out
of
this,
the
other
one
is
it's
just
the
way
in
which
this
stacks
up,
there's
a
institutional
technology.
A
So
again
listen!
This
is,
this
is
a
fairly
obvious
statement
once
you
see
where
this
goes,
that
blockchain
as
a
protocol,
institutional
layer
that
you
can
then
attach
in
property
rights
and
payment
systems,
and
so
on
that
then
becomes
a
industry
or
a
platform
layer
for
everything
that
is
autonomously
digital,
that
you
want
to
build.
On
top
of
that.
So
again,
this
this
becomes
of
next
generation
infrastructure
for
a
set
of
other
technologies
that
will
need
to
contract.
That
will
need
to
be
able
to
make
direct
contracting
into
that.
A
So
there's
the
sort
of
machine
learning
and
Internet
of
Things,
and
so
on
aspect
of
that.
But
the
other
thing
is
what
happens
underneath.
That
is
what
this
does
to
regulatory
frameworks
and
law.
You
had
code
them
in
they
become
part
of
the
platform
and
that
sort
of
hard
coding
regulation
into
a
platform,
and
this
is
something
that's
from
an
Australian
perspective.
We've
been
particularly
excited
about
this,
because
what
this
enables
you
to
do
is
if
you're
in
a
jurisdiction
it
has
high
quality
legal
frameworks
and
and
and
effective
regulatory
frameworks.
A
But
but
it's
it's
a
is
it's
it's
one
of
these
things
that
I
think
this
is
that
this
is
what
sort
of
globalization
2.0
looks
like
it's
not
just
you
know
the
classical
economists
looking
at
resources-
and
you
know,
minerals
and
and
things
being
moving
around
the
world.
It's
actually
institutions
that
are
now
able
to
be
exported
and
coded
up
and
compete
with
each
other
in
that
space.
So
this
this
notion
of
blockchain
sort
of
as
the
infrastructure
for
autonomous
digital
technologies
up,
but
it's
also
infrastructure
for
institutional
technologies
below
that's
the
layer.
It's
playing.
A
So
the
reason
that
data
markets
emerge
here
is
because
of
what
blockchain
is
able
to
do
to
property
rights
in
this
and
this
in
the
same
context,
so
we're
very
excited
at
what
this
is
going
to
do
to
the
health
sector.
I
think
this
is
the
health
sector
is
basically
made
of
just
data
transactions
and
the
prospects
of
having
these
things
being
organized
through
markets
rather
than
being
organized
through
large
hierarchies,
is
a
potential
source
of
huge
productivity
gains
and
innovation
in
that
space.
A
Self
sovereign
blockchains:
this
was
an
idea
that
I've
been
thinking
around
thinking
about
as
well
and
in
terms
of
the
way
in
which
you
can
spin
up
your
own
abilities
to
project
and
prove
claims
and
statements
about
yourself
about
shared
information.
So
this
whole
notion
of
thinking
of
it
as
a
platform
as
a
as
a
platform
infrastructure
that
can
be
spun
up
to
create
property
rights
and
and
trade
infrastructure
and
regulation
and
governance
fit
for
purpose
and
and
it's
whatever
scaled
needs
to
happen.
A
It's
the
same
fundamental
infrastructure
that
we've
never
really
thought
of
that
before,
because
we've
never
been
able
to
push
property
rights
into
those
spaces,
we've
never
been
able
to
push
contracting
into
those
spaces.
We've
never
really
had
decentralized
governance
in
those
spaces
in
any
significant
way.
A
So
what
this
looks
like
to
us
is
that
the
economy
itself
has
just
gotten
bigger
in
terms
of
there's
more
and
more
things
being
bought
into
it,
but
understanding
an
economy
of
coordination,
not
an
economy
of
resources
and
an
economy
of
solving
coordination,
problems
of
things
coming
together
to
create
value
whatever
those
things
are,
whether
they're
humans
or
machines,
or
whatever.
It's
all
the
same
problem.
What
they
need
is
institutional
infrastructure
to
connect
them
all
together.
A
Those
are
markets,
but
what
a
blockchain
is
doing
is
basically
providing
a
way
to
spin
those
markets
up
without
having
to
rely
on
centralized
registries
to
generate
them
and
to
generate
the
underlying
conditions
in
the
first
place.
So
that's
the
the
way
in
which
we've
we've
been
framing
this
economics
of
blockchain
and
the
blockchain
economy
and
I'll
finish
there.
Thank
you.
C
So
I'm
not
going
to
take
more
than
just
a
couple
of
minutes
to
just
explain
a
little
bit.
Jason
has
given
us
a
wonderful
overview
of
the
the
models
and
the
theoretical
frameworks
that
we're
working
with
I
just
want
to
explain
what
we
could
do
with
those
models
and
why
we
think
it's
such
an
exciting
space
to
be
in
from
both
an
academic
and
a
really
practical
sense.
C
So,
as
Jason
mentioned,
we're
the
world's
first
social
science
research
center
into
blockchain
technology,
we're
a
group
of
economists,
sociologists,
political
scientists
who
believe
that
this
as
an
institutional
technology,
is
not
and
should
not
just
be
the
domain
of
engineers
and
computer
scientists.
But
we
actually
need
social
science
research
to
not
just
help
understand
the
consequences,
but
to
help
guide
the
technology
and
help
provide,
hopefully
some
insight
about
not
just
mechanism
design
but
corporate
strategy
and
so
forth.
C
And
so
that's
that's
that's
our
mission
and
that's
what
the
RMIT
blockchain
innovation
hub
was
set
up
to
do
so,
specifically,
what
we
do
is
it's
a
range
of
things.
We
do
the
fundamental
research,
so
jason
has
explained
the
basics
of
institutional
crypto
economics.
We're
also
looking
at
applications
of
blockchain
technology
using
those
frameworks
into
democratic
outcomes,
whether
that's
corporate
democracy
and
voting
systems,
whether
that's
political
voting
systems.
C
How
can
you
use
this
technology
to
not
just
empower
voting
mechanisms
but
to
actually
change
what
we
vote
on
and
and
and
how
we
structure
our
political
systems?
Nano
economics
is
the
program
that
we're
working
with
with
a
gorrik,
and
we
think
that's
a
really
exciting
space
to
be
in
we're
also
looking
at
on
and
off
chain
governance
we're
looking
at
post,
blockchain
political
economy
once
these
changes
occur.
C
How
does
it
change
the
relationship
between
citizen
and
state
and,
of
course,
we're
working
with
a
very
large
group
of
firms
across
everything,
from
supply
chains
to
health
all
the
way
to
crypto
cities,
geospatial
economics,
we're
working
with
the
legal
center
sector
as
well
I'm
just
trying
to
identify
not
just
how
block
chains
can
be
used,
but
how
will
it
shift
those
those
economies?
What
is
really
exciting
to
us,
though,
is
the
public
policy
focus
as
well
a
lot
of
the
findings
that
we've
pulled
out
of
that
fundamental
research
have
really
significant
public
policy
consequences.
C
That's
why
we've
established
things
like
the
worldwide
blockchain
Innovation,
Association,
International
Society,
for
the
study
of
decentralized
governance
and
and
a
bunch
of
groups
like
that
to
try
to
coordinate
the
industry,
because
it's
an
industry
that
we
think
we
can
add
some
value
to,
and
social
scientists
can
add
some
value
to,
and
we
we
hope
to
provide
some
some
way
of
insight
and
and
and
research
into
that
right.
Now,
though,
our
research
focus
is
is
very
broad.
C
We
think
that
the
theoretical
models
and
frameworks
the
JSON
has
outlined
actually
gives
us
a
new
way
into
answering
some
very
old
questions
and
throws
up
new,
challenging
questions.
That's
everything
from
how
do
you
design
consensus
mechanisms
that
take
into
account
the
economics
of
voting
the
economics
of
constitutions?
C
One
of
the
big
challenges
in
the
blockchain
spaces
we've
known
is,
is
on
and
off
chain.
Governor
turns
out.
Economists
and
social
science
have
been
looking
at
governance
for
a
very
long
time.
We
think
we've
got
some
insights
in
that
space.
We've
got
some
insights
into
corporate
strategy.
If
the
reform
organization
becomes
a
successful
form
of
organization.
What
should
firms
do
tomorrow?
Not
blockchain
firms,
but
what
should
a
investment
company
do?
What
should
superannuation
or
pension
fund
do?
How
should
they
respond
to
these
big
changes?
C
How
should
we
respond
to
the
availability
of
new
ways
of
corporate
organization?
Jason's
mentioned
data
markets
and
and
health?
But
of
course
there
are
big
privacy
questions
there,
we're
interested
in
using
this
technology
and
understanding
this
technology,
so
it
can
be
used
in
the
developed
world,
one
of
the
it's
all
well
and
good
for
us
to
be
able
to
explore
Australian
institutions,
but
what
if
people
want
to
make
a
choice
of
Australian
or
American
or
Chinese
or
or
European
Union
institutions
in
countries
that
have
very
broken
institutional
settings?
C
So
my
colleagues
and
I
were
in
Papua
New
Guinea
Papua,
New
Guinea,
one
of
the
poorest
countries
in
the
world
very
broken,
very
corrupt
institutions.
It
one
of
the
things
that
they're
very
excited
about,
is
being
able
to
layer
better
institutions
on
top
of
those
old
corrupt
ones
without
having
to
reform
the
old,
corrupt
ones.
We're
interested,
of
course,
in
the
evolution
of
property
rights.
That's
the
that's
the
Nana!
C
That's
has
we
understand
and,
as
we
suggest,
the
nano
economics
research
area
we're
interested
in
what
happens
when
platform
or
economics
turns
into
protocol
economics,
we're
interested
in
changes
to
civil
society
and
so
forth.
So
we've
got
a
really
big
research
agenda,
it's
a
very
exciting
research
agenda
and
it's
based
on
a
very
rigorous
model,
a
collection
of
frameworks
and
a
model
about
the
future
of
the
economy.
Everybody
is
pretty,
everybody
thinks
they
know
where
the
future
of
the
economy
is
going
to
go
from
blockchain
to
AI
to
5g.
C
There's
a
lot
of
predictions
about
the
future.
We
think
we've
got
a
model,
we
think
we've
got
a
rigorous
model
that
can
be
applied
and
has
real
insights
in
into
the
future
of
the
Australian
economy,
the
economy
of
the
United
States,
the
global
economy,
the
economy
of
cities,
the
economy
of
machines.
So
thank
you
for
the
opportunity
to
speak
to
you
today.
B
You
mentioned
the
cost
of
trust
and
how
lawyers
and
various
things
would
be
would
fall
into
that
they're
saying
at
least
a
part
of
the
job
they
do
is
not
about
truthfulness,
but
about
finding
compromise
or
representing
interests
which
might
be
entirely
truthful
but
still
not
aligned.
So
the
negotiation
of
the
salary.
You
know
Mike
and
so
I'm
curious
how
much
how
to
pull
that
out
of
the
cosmic
trust
or
whether
you
would
counter
that
if
your
model
or
what
your
thoughts
are
about,
how
that?
A
So
the
question
is
really
really
what
comes
as
part
of
the
cost
of
trust,
in
particular
circumstances
which
might
include
bargaining,
for
instance,
the
example
of
lawyers
of
the
extra
two
bits
in
autism
to
talk,
but
they
also
spend
a
lot
of
time
doing
fine,
it's
true
management
as
well
management,
there's
a
lot
of
time,
monitoring
and
shaking,
but
they
also
do
a
lot
of
strategy
as
well.
No,
there
are
obvious
complementarities
between
those
rods.
A
A
A
An
unbundling
at
the
strategic
aspect
from
the
monetary
aspect
aspect
from
the
verification
aspect.
You
see
this,
in
fact,
the
sub
profession,
for
this
is
very
clear
and
accounting.
This
is
probably
the
best
ones
where
you've
got
part
of
the
role
of
accounting
is
just
to
make
sure
from
the
talent
and
promise.
A
We
need
to
know
that
it's
to
allocate
capital
efficient
and
want
to
figure
out
who
knows
what
tax,
but
whether
there's
what
the
big
four
accounting
firms
in
realize,
as
long
as
you're
doing
that
you're
in
a
really
good
position
to
offer
strategy
services.
So
we
just
have
a
lot
of
modern
industries,
have
grown
up
around
the
ability
to
bundle
those
things.
That's
so
I
mean
what
we
basically
predict
is.
This
would
be.
This
could
be
highly
disruptive
of
the
professional
services
in
the
way
that
they've
grown.
C
Bargaining
changes,
so
one
of
the
debates
that
we
have
in
the
institutional
or
crypto
economics
side
is
to
what
extent
does
blockchain
change
the
balance
between
complete
and
incomplete
contracts.
So
complete
contract
is
a
contract
that
you
can
write
where
every
contingency
is
planned.
For
you
know,
if
the
if
the
aliens
invade,
then
you
know,
I
will
pay
you
x
y&z.
C
But
of
course
we
don't
really
write
complete
contracts,
because
that
would
you
know
you
can't
imagine
every
potential
consists:
can
contingency,
so
you
write,
incomplete
contracts
and
bargain
after
the
fact
or
we'll
have
some
internal
structure
into
that.
How
does
the
blockchain
change
that
that
that
dynamic,
well
blockchain
itself
doesn't
if
blockchain
helps,
enforce
and
preliminary
tune?
Ism
make
sure
that
contracts
once
the
terms
and
conditions
have
been
applied,
they'll
actually
transact,
but
but
Jason
described
the
blockchain
as
as
the
sort
of
infrastructure
or
layer
for
a
bunch
of
new
technologies.
C
The
reason
that
we
don't
have,
or
the
reason
that
many
of
our
contracts
are
as
incomplete
as
they
are
right
now,
is
because
we
have
limited
cognitive
capacity
to
write,
longer
and
and
more
complete
ones,
and
and
so
once
you've
combined
the
opportunities
in
reducing
blockchain
with
the
artificial
intelligence
or
some
sort
of
cognitive
economizer.
You
can
actually
write
different
contracts
and
enforce
them
differently
under
a
different
institutional
framework.
A
A
With
the
human
that
the
loop
is
the
fundamental
bottleneck,
how
far
you
can
actually
push
that
to
the
specialization
recombination,
so
I
think
this
is
a
seamless
is
an
unbundling
process,
but
what
the
unbundling
process
drives
is
benefits
with
one
of
the
house
modernization
and
what
we
know
about
the
origin
of
recombination
of
modules
there
anything
that
drives
a
modernization
is
still
paying
ously
driving
the
prospects
of
an
increased
space
of
recombination.
What
is
that?
So
again,
this
is
a
innovation
platform.
A
B
The
way
in
which
you
just
brought
in
artificial
intelligence
as
a
completeness
of
contracts
scarcity,
the
old
common
wall,
understanding
of
a
contract,
is
meeting
of
the
most
meaningful.
The
contracting
parties
have
to
have
a
joint
understanding
of
what
it
is
they're
doing.
The
growth
of
complexity
and
contracts
forget
watching
in
the
mainstream
economy.
B
The
growth
of
complexity
of
contracts
has
really
reduced
their
utility
as
a
means
to
bring
about
a
meeting
with
the
people
signed
contracts
all
the
time,
not
knowing
what
it
means
and
there's
this
other
category
of
expense,
expert
lawyers
that
the
contracting
partners
turn
to
have
to
turn
to
specialized
experts,
because
they
cannot
understand
what
the
contract
means
on
its
own
terms.
I
think
that
the
opportunity
that
we
should
be
stressing
more
is
the
ability
to
have
the
meanings
of
the
contract,
be
clearer
and
simpler
and
I.
B
C
A
A
B
Similar
thought
process
pop
up
between
watchings
and
they
think
you
both
mentioned
the
possibility
of
using
box
chains
as
institutional
technology
in
areas
of
world
that
don't
miss
and
institutions.
So
I'm
curious
as
to
what
your
thoughts
are
in,
how
the
institutional
technology
meets
the
road
and
how
it
actually
can
handle
violence.
A
Sir,
this
is
this
question
is
better
than
this
is
the
question
of
road
of
how
to
the
self
sovereign
institutional
technology
can
exist
in
a
world
of
physical
violence
incidents
on
it
and
have
your
square
that
helps
the
problem
in
that
space.
Two
things,
one
is
what
is
striking
about
the
development
of.
A
A
A
A
B
C
C
Who
says
that
that
information
was
correct
at
that
given
time
if
you've
got
a
little
QR
code
sticker
and
you
pop
it
on
the
beef
and
it
goes
to
China?
Well,
what?
If
someone
took
the
sticker
off
and
put
it
on
something
else?
So
and
and
we've
got,
we've
got
ways
to
deal
with
that
and
we
are
developing
ways
to
deal
with
that.
C
The
working
on
a
blockchain,
if
you,
if
you
could
in
any
way,
spend
your
whole
life
on
Bitcoin,
yes,
theoretically,
you'd
be
away
from
all
government,
but
a
they
could
knock
on
your
door
because
you've
got
hidden
assets
or
they
could
prevent
you
taking
the
money
out
and
converting
into
fiat
currency.
These
are.
These
are
genuinely
really
really
big
problems
that
we
have
to
deal
with
with
again
those
those
second
layers
of
institutional
technologies
and
the
story
that
Jason
is
explaining.
C
That
tells
you
that
the
big
interface
question
here
is
about
the
interface
between
the
blockchain
worlds
or
the
Internet
world
and
identity,
and
how
we
link
these
identities
in
together,
because
if
we
want
to
go
down
a
club-style
route,
which
is
what
Jason's
describing
we'll
need
really
high
quality
identity
technologies,
that
people
want
will
care
about,
losing
or
care
about,
protecting
or
they
will
get
benefits
for
maintaining
or
that
sort
of
like
Dada
Dada
is
that
is
a
10
20
year
program
of
work
for
the
community.
I
think
please.
C
It
wouldn't
so
the
difference.
Sorry,
why
would
a
so?
The
question
is:
why
would
a
corrupted
political
institution
or
political
jurisdiction
adopt
a
blockchain?
My
claim,
or
our
claim
is
that
they
wouldn't
the
problem
that
we
have
in
there's
there's
a
couple
of
ways
to
think
about
how
we
can
get
poor
countries
to
become
rich
countries
and
and
these
days
most
people
agree
that
the
problem
is
bad
institutions.
C
The
institutional
economists
have
been
convincing
on
this
point,
but
our
response
so
far
with
we've
said
yes,
okay,
the
problem
with
you,
the
poor
country,
is
that
you
are
you've,
got
a
lot
of
corrupt
institutions
and
then
the
poor
country
say
well.
What
should
we
do
about
that
and
we
respond
with?
Well,
don't
be
so
corrupt.
C
That's
no
help
whatsoever
because
you
know
corruption
exists
for
a
reason,
and,
and
until
now
our
only
response
to
say
a
corrupt
legal
system
has
been
reformed.
The
legal
system
that's
really
hard
because
there
are
rent
seekers
and
people
get
benefits
out
of
the
bad
legal
system.
We
suddenly
now
have
a
technology
where
you
could
choose,
for
instance,
to
enforce
a
contract
in
the
old,
corrupt
legal
system
or
on
a
blockchain
or
any
number
of
block
chains,
and,
and
the
government
really
can't
do
much
about
it.
Yes,
we
have
the
interface
question.
C
How
would
you
enforce
those
contracts
if,
if
they
require
physical
enforcement,
but
in
many
financial
contracts,
the
ones
that
we're
concerned
about
you
can
enforce
those
on
the
blockchain
or
on
a
chain
or
on
some
sort
of
distributed
ledger?
And
you
don't
have
to
fix
all
the
bad
corrupt
institutions?
C
This
is
a
unique
change
and
we
move
from
a
development
strategy
that
is
just
you
know:
either
send
Western
experts
into
poor
countries
and
tell
them
just
to
be
less
corrupt
or
do
so
with
tanks
and
all
that
sort
of
thing
now.
Entrepreneurs
can
build
other
frameworks,
other
institutional
frameworks
on
which
they
can
achieve
some
of
their
goals.
I
think
that's,
that's
a
really
weird
and
exciting
thing
and
is
a
good
portent
for
the
future.
A
A
A
A
We're
going
to
use
to
represent
this
you've
got
the
keys
UN,
so
new
types
of
property
rights
can
emerge
when
a
community
decides
that
this
is
how
we're
going
to
create
resources
and
share
resources
and
transfer
value,
and
it's
that
community
used
to
find
is
just
that
which
uses
the
protocol,
so
a
community
can
excel
to
manage
that
sense,
and
what's
interesting
here,
is
that
you
know
we're
quite
used
to
to
emergent
community.
We
always
think
of
in
this
community
no
objects
or
associated
communities
that
they're
communicating
their
language
group
and
that's
on.
A
What
is
new
here
is
the
earlier
that
they
can
take
with
them
and
build
for
themselves,
the
self
sovereign
sense
property
rights
which
didn't
become
a
basis
for
contract,
just
basic
economic
infrastructure.
So
this
mighty
river
of
a
again
just
our
language
isn't
quite
up
to
us.
We
have
this
notion
of
a
secessionist
group.
There
is
often
starts
a
new
country,
but
we
don't
have
any
emergent
economy
because
all
economies
of
the
merger
still
in
other
economies,
they're
still
working.
A
What
do
you
call
that
country
there's
a
community
of
people
that
are
doing
governance
and
there's
about
money,
making
money,
the
native
platform,
property
rights,
but
all
of
the
things
that
we
normally
think
of
as
the
United
Nations
representation,
but
short
of
that
we're
kind
of
describing
emergence
in
that
country.
So
I
think
that
motion
one
of
my
colleagues
I'm
trying
to
tell
is
quite
clear
that
there's
some
type
of
crypto
secession.
This
idea
that
and
what
we're
observing
here
is.
B
Europe,
the
way
you
speak
about
intellectual
property,
in
particular
has
been
possible.
I
certainly
believe
that
this
technology
is
going
to
give
us
systems
and
property
rights
that
are
much
stronger,
much
less
corruptible,
more
flexible
than
we've
seen
before,
but
the
phrase
intellectual
property
generally
is
talking
about
the
scarcity
of
use
of
information
made
public
and
once
information
is
revealed,
there
is
no
technology
that
can
prevent
its
retention
and
further
distribution.
B
A
C
B
C
Then
we're
seeing
the
invention
of
new
forms
of
intellectual
property
and
I
suspect
that
we're
going
to
see
the
empowerment
of
a
type
of
intellectual
property
that
was
not
seen
as
so
significant,
so
new
forms
of
intellectual
property,
crypto
kitties,
is
a
new
form
of
intellectual
property.
The
question
is:
is
that
an
indicative?
Is
that
a
harbinger
of
something,
or
is
that
just
a
cute
thing
that
happened
once
it
may
be
a
bit
of
both
but
I
like
to
think
about
this
in
the
data
access
context?
So
what
we're
all
worried
about?
C
You
know
the
data
that
goes
to
Facebook
or
Google,
or
something
like
that
or
or
to
Ashley
Madison
or
something
that's.
You
know
famously
leaked
what
we
are
in
fact
as
humans,
what
we
are
more
protective
of
and
what
as
entrepreneurs
or
people
acting
in
an
economy
were
more
interested
in,
is
not
these
snapshots
of
data
but
access
to
an
ongoing
movement
of
data,
and,
if
you
think
about
intellectual
property,
is
access
to
stuff.
C
That
chain
is
overtime,
so
it's
all
or
it
would
be
bad
if
your
Facebook
private
messages
were
leaked,
it
would
be
significantly
worse
and
more
valuable
to
anyone.
If
information
about
your
messages
over
time
will
leaked-
and
that's
precisely
think
about
it-
we've
talked
a
lot
about
health
data
markets.
C
It's
all
well
and
good
to
get
a
snapshot
of
your
your
fitness
at
any
given
moment,
but
what
companies
want
to
buy
from?
You
is
not
just
your
fitness
at
any
given
moment,
but
either
the
fitness
of
everyone
at
any
given
moment
or
you
over
time
and
that's
where
the
value
is
and
that's
a
new
way
of
thinking
about
intellectual
property,
I
think
we're
stuck
on
thinking
about
IP
as
simply
a
movie
or
a
book,
or
something
like
that.