KEYNOTE ADDRESS: SOME SIMPLE ECONOMICS OF THE BLOCKCHAIN

The presentation will focus on how blockchain technology and cryptocurrencies will influence innovation, and discuss two key costs that are affected by them: the cost of verification; and the cost of networking. Markets facilitate the voluntary exchange of goods and services between buyers and sellers. For an exchange to be executed, key attributes of a transaction need to be verified by the parties involved at multiple points in time. Blockchain technology, by allowing market participants to perform costless verification, lowers the costs of auditing transaction information, and allows new marketplaces to emerge. Furthermore, when a distributed ledger is combined with a native cryptographic token (as in Bitcoin), marketplaces can be bootstrapped without the need of traditional trusted intermediaries, lowering the cost of networking. This challenges existing revenue models, and opens opportunities for new business models, as well as new identity, provenance and reputation systems. After a brief presentation of the framework, the Q&A will focus on applications in healthcare.

Christian Catalini, PhD, Fred Kayne (1960) Career Development Professor of Entrepreneurship & Assistant Professor of Technological Innovation, Entrepreneurship, and Strategic Management, MIT Sloan School of Management