Foundations of Cryptoeconomic Systems

Shermin Voshmgir () and Michael Zargham ()

No 1, Working Paper Series/Institute for Cryptoeconomics/Interdisciplinary Research from WU Vienna University of Economics and Business

Abstract: Blockchain networks and similar cryptoeconomic networks aresystems, specifically complex systems. They are adaptive networkswith multi-scale spatiotemporal dynamics. Individual actions towards a collective goal are incentivized with "purpose-driven" tokens. These tokens are equipped with cryptoeconomic mechanisms allowing a decentralized network to simultaneously maintain a universal state layer, support peer-to-peer settlement, andincentivize collective action. These networks therefore provide a mission-critical and safety-critical regulatory infrastructure for autonomous agents in untrusted economic networks. They also provide a rich, real-time data set reflecting all economic activities in their systems. Advances in data science and network sciencecan thus be leveraged to design and analyze these economic systems in a manner consistent with the best practices of modern systems engineering. Research that reflects all aspects of these socioeconomic networks needs (i) a complex systems approach, (ii) interdisciplinary research, and (iii) a combination of economic and engineering methods, here referred to as "economic systems engineering", for the regulation and control of these socio-economicsystems. This manuscript provides foundations for further research activities that build on these assumptions, including specific research questions and methodologies for future research in this field.

Keywords: blockchain; bitcoin; cryptoeconomics; tokens; complex systems; system theory; systems engineering; economics; network science (search for similar items in EconPapers)
Date: 2019-11-16
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