# Blockchain Technology as Economic Infrastructure: Revisiting the Electronic Markets Hypothesis Content type: Research Paper Summary: This paper re-evaluates the Electronic Markets Hypothesis (EMH) through the lens of blockchain technology, arguing that DLT serves as a fundamental economic infrastructure that lowers transaction costs and enables new forms of market coordination. The authors trace the development of market theory, contending that blockchain automates trust and reduces the need for costly intermediaries. By analyzing the structural impact of distributed ledgers on institutional economics, the paper illustrates h Key concepts: Chris Berg, Sinclair Davidson, Jason Potts, economics, market theory, transaction costs, institutional economics, smart contracts
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Blockchain Technology as Economic Infrastructure: Revisiting the Electronic Markets Hypothesis

Chris Berg, Sinclair Davidson, Jason Potts

Academic PaperJanuary 2019

Abstract

This paper re-evaluates the Electronic Markets Hypothesis (EMH) through the lens of blockchain technology, arguing that DLT serves as a fundamental economic infrastructure that lowers transaction costs and enables new forms of market coordination. The authors trace the development of market theory, contending that blockchain automates trust and reduces the need for costly intermediaries. By analyzing the structural impact of distributed ledgers on institutional economics, the paper illustrates how smart contracts can facilitate complex trade agreements and asset exchanges without traditional clearinghouses. The study bridges the gap between technical blockchain design and macroeconomic theory, proposing that decentralized systems fundamentally alter the cost structures of firm and market operations. The research concludes that blockchain does not merely optimize existing processes but acts as a revolutionary layer for building decentralized economic institutions, necessitating a new framework for understanding the future of institutional market design.

Key Findings

  • 1Blockchain functions as a new economic infrastructure that drastically reduces institutional transaction costs.
  • 2Smart contracts enable trustless market coordination, minimizing the necessity for intermediaries and third-party clearinghouses.
  • 3The adoption of blockchain necessitates a revision of existing theories regarding market hierarchy and firm governance.
  • 4Decentralized ledger technology effectively automates trust, shifting economic value creation toward protocol-based coordination.

Topics

economicsmarket theorytransaction costsinstitutional economicssmart contracts
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Citation

Chris Berg, Sinclair Davidson, Jason Potts (2019). Blockchain Technology as Economic Infrastructure: Revisiting the Electronic Markets Hypothesis. Academic Paper. https://www.frontiersin.org/journals/blockchain/articles/10.3389/fbloc.2019.00022/full

BibTeX

@misc{blockchaintechnology2019,
  title = {Blockchain Technology as Economic Infrastructure: Revisiting the Electronic Markets Hypothesis},
  author = {Chris Berg and Sinclair Davidson and Jason Potts},
  year = {2019},
  howpublished = {\url{https://www.frontiersin.org/journals/blockchain/articles/10.3389/fbloc.2019.00022/full}},
}

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