The roots of the tragedy of Genoa, and how Blockchain and Token-Economics can help in the future

Andrea Bianconi
Aug 22, 2018 · 7 min read
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The collapse of the Morandi bridge in Genoa — Italy

Collapsing infrastructures

The dramatic collapse of the “Morandi” highway bridge in Genoa has deeply shaken me. I was taken by a deep sense of sadness as well as by a growing rage.

Wrong incentives are a recipe for disaster

Leaving aside the technical reasons behind the collapse and the specific responsibilities which will be ascertained by the competent authorities, there is one very fundamental reason at the root of this tragedy: the wrong incentives and a wrong model for privatizations.

Token-economics to effectively align incentives

Although the origins of token-economics can be traced back to the early 19th century — in the field of psychiatric studies — the term is now commonly borrowed by the crypto world to refer broadly to a system of economic incentives used to influence stakeholders´ behavior towards a predefined virtuous model which benefits the whole system. Token-economics is a branch of the social studies and it does not differ from traditional economics, except that it looks closely at behavioral economics and game theory in order to provide the right economic incentives to drive individual behavior.

Building a new Blockchain based system to manage strategic public assets

Let’s take now the case of the Italian highways and how this failed concession system can be redrawn using the Blockchain and token-economics to give all the stakeholders many better-aligned incentives to behave properly.

Conclusions

Clearly, the practical implementation of the above mechanism will face a number of complex challenges, mainly political as well as legal and technical. Although I am reasonably confident that legal and technical issues can be effectively dealt with, politically it is a different game altogether. What is important to note here is that this new mechanism and the combined use of the Blockchain and token-economics will align much more effectively the stakeholders´ incentives and it will disincentivize the maximization of private profits and the minimization of maintenance and investment costs, which is the real root of this tragedy. Considering the current state of public investments in vital infrastructure projects in Italy and the call for a solution to the current impasse, the above proposal is at least worth some careful consideration and a constructive and unbiased political debate.


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