Blockchain technology: From the perspective of institutional economics

The research aims to understand the change that blockchain technology would bring. Blockchain profoundly affects not only economic life but also social and political life. Therefore, the subject has been examined from the perspective of institutional economics which sees close connections between all areas of the social order and economics. The ontological and epistemological foundations of institutional and systems thinking overlap. By the synthesis of these thoughts in the research, a General Institution Model is established where the role of ledgers is pointed. Blockchain replaces the need for a central authority to keep ledgers trustfully. It triggers institutional change. According to the New Institutional School approach, the expected change is Schumpeterian and Coasian in nature. Therefore, even if the triggered change may cause large-scale and rapid changes, it will not conclude a paradigm shift. On the other hand, according to the Original Institutional approach, it will cause a change that has Veblenian in nature. The cumulative change of thought habits and value judgments of social actors may lead to an evolutionary paradigm shift towards an eco-system dominated by decentralized institutions. However, the direction of evolutionary change in social systems is uncertain. Countless elements and relationships, probabilistic behavior, and the emergence of counter-disruptive innovations are the main reasons for this uncertainty.