Why Blockchain Drives Fundamental Economic Transformation

Blockchain will cause structural changes in economies

Published in

CV VC

3 min readSep 20, 2019

Abstract

Blockchain is more than technology. It is a fundamentally new way to ascertain property rights, coordinate economic activity and transfer value.

CV VC AG is investing in blockchain startups, building an ecosystem, and advising both startups and corporates. At an event for its LPs and investors in June 2019, Ralf Kubli of CV VC is leading a conversation with Economics Professor Jason Potts and Outlier Venture Partner Matt Law, on why and how Blockchain will drive fundamental transformation of economies.

This article is divided into sections focusing on key topics which can be watched independently.

Why is Blockchain fundamentally new: Economic theory and decentralization
Which economic sectors will adopt Blockchain first
The cost of trust: How trust as a platform will drive new business models
Blockchain governance: Once everything is decentralized — who will be in charge?
Libra — what’s in store
Watch the entire video here and find more resources on Blockchain

Introduction

Blockchain is more than a tech stack. It is a fundamentally new way to ascertain property rights, coordinate economic activity and transfer value. Believers in this technology see a future where everything will be tokenized. As a consequence the way we interact with financial instruments, real goods, immaterial goods, proprietary data, work products, and so on will fundamentally change.

In our talk, we start with the theoretical underpinnings of how economists think of institutions of capitalism, such as firms, markets and governments and why Blockchain is such a fundamental innovation. Building on this understanding, we discuss which sectors of the economy may adopt Blockchain first and assess the structural impact on certain economic sectors (hint: it’s a bad time to be an accountant or banker). Since Blockchains are also referred to as “trustless” systems, we explore how expensive cost is, and how future business models will be enabled impacting economic activity. After discussing trust, the topic of Governance takes center stage. Once everything is decentralized, machines interact with each other and algorithms control the world, who will really be in charge?

Lastly, the subject of Libra. A few days prior to the recording of the event (June 2019), Libra had been announced. In this segment, we discuss the topic of private money and why it will remain relevant.

Economic Theory, Decentralization and Distributed Systems

Why Blockchain is a fundamentally new invention and how institutions of capitalism will be impacted.

Which Economic Sectors will adopt Blockchain first

Structural changes in economies are coming, the question, where will it happen first?

The cost of trust: How trust as a platform will drive new business models

Economic activity will increase dramatically, as the cost of trust is reduced.

Blockchain governance: When everything is decentralized — who will be in charge?

When governance is coded into protocols, how can we think of on-chain and off-chain governance and which platforms will win in the long run?

Libra — what’s in store

A few days prior to the event, Libra was publicly announced. We touch on the questions of private money, power of governments and the future of transaction platforms.