AUTHOR=Berg Chris , Davidson Sinclair , Potts Jason 

TITLE=Proof of Work as a Three-Sided Market

JOURNAL=Frontiers in Blockchain

VOLUME=Volume 3 - 2020

YEAR=2020

URL=https://www.frontiersin.org/journals/blockchain/articles/10.3389/fbloc.2020.00002

DOI=10.3389/fbloc.2020.00002

ISSN=2624-7852

ABSTRACT=Blockchain technology is the distributed, decentralised ledger technology underlying Bitcoin and other cryptocurrencies. We apply Oliver Williamson’s transactions cost analysis to the blockchain consensus mechanism. Blockchains reduce the costs of opportunism but are not ‘trustless’. We show that blockchains are trust machines. Blockchains are platforms for three-sided bargaining that convert energy-intensive computation into economically-valuable trust.