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The Value of Decentralization Using the Blockchain with Marco Reuter | a16z crypto research talks

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Although blockchain technology and cryptocurrencies have grown in popularity, no consensus has emerged about the value they bring, if any, to economic interactions. In this presentation, Marco Reuter (economics, Mannheim) argues that a fundamental value the blockchain provides is commitment. He develops a game theoretic model of an entrepreneur who can create a network for users. The entrepreneur can decide to retain control of the network with centralized implementation through a regular company, or surrender control to users with a decentralized implementation through the blockchain. Users that join the network are subject to a locked-in effect. Marco shows that a decentralized implementation of the network is both preferred by the entrepreneur and a Pareto improvement if and only if the size of the locked-in effect is sufficiently large. About the speaker Marco is a PhD candidate at the University of Mannheim, Germany. He is a microeconomic  …...more
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The Value of Decentralization Using the Blockchain with Marco Reuter | a16z crypto research talks
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1,192Views
2023Jan 13
Although blockchain technology and cryptocurrencies have grown in popularity, no consensus has emerged about the value they bring, if any, to economic interactions. In this presentation, Marco Reuter (economics, Mannheim) argues that a fundamental value the blockchain provides is commitment. He develops a game theoretic model of an entrepreneur who can create a network for users. The entrepreneur can decide to retain control of the network with centralized implementation through a regular company, or surrender control to users with a decentralized implementation through the blockchain. Users that join the network are subject to a locked-in effect. Marco shows that a decentralized implementation of the network is both preferred by the entrepreneur and a Pareto improvement if and only if the size of the locked-in effect is sufficiently large. About the speaker Marco is a PhD candidate at the University of Mannheim, Germany. He is a microeconomic theorist with interests in market and mechanism design. Currently, he is focussing on the economics of blockchains and cryptocurrencies. More: https://marco-reuter.com/ About a16z crypto research a16z crypto research is a multidisciplinary lab that works closely with our portfolio companies and others toward solving the important problems in the space, and toward advancing the science and technology of the next generation of the internet. Our researchers are technologists, scientists, cryptographers, and cryptocurrency experts, working to bridge the worlds of academic theory with industry practice, and to help shape crypto and web3 as a formal area of study. More about us: a16z.com/2022/04/21/announcing-a16z-crypto-research More from the a16z crypto team
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