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Home » Bettina Warburg: How the Blockchain will Radically Transform the Economy (Transcript)

Bettina Warburg: How the Blockchain will Radically Transform the Economy (Transcript)

Bettina Warburg

Here is the full transcript of blockchain researcher, entrepreneur and educator Bettina Warburg’s Talk: How the Blockchain will Radically Transform the Economy at TED conference. 

Bettina Warburg – Blockchain researcher, entrepreneur and educator

Economists have been exploring people’s behavior for hundreds of years: how we make decisions, how we act individually and in groups, how we exchange value. They’ve studied the institutions that facilitate our trade, like legal systems, corporations, marketplaces.

But there is a new, technological institution that will fundamentally change how we exchange value, and it’s called the blockchain. Now, that’s a pretty bold statement, but if you take nothing else away from this talk, I actually want you to remember that while blockchain technology is relatively new, it’s also a continuation of a very human story, and the story is this.

As humans, we find ways to lower uncertainty about one another so that we can exchange value. Now, one of the first people to really explore the idea of institutions as a tool in economics to lower our uncertainties about one another and be able to do trade was the Nobel economist Douglass North. He passed away at the end of 2015, but North pioneered what’s called “new institutional economics”. And what he meant by institutions were really just formal rules like a constitution, and informal constraints, like bribery.

These institutions are really the grease that allow our economic wheels to function, and we can see this play out over the course of human history. If we think back to when we were hunter-gatherer economies, we really just traded within our village structure. We had some informal constraints in place, but we enforced all of our trade with violence or social repercussions. As our societies grew more complex and our trade routes grew more distant, we built up more formal institutions, institutions like banks for currency, governments, corporations.

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