Machine, Platform, Crowd: Harnessing Our Digital Future

At the time, a fierce debate was raging about whether centrally planned economies like that of the Soviet Union—in other words, economies where there was a single core responsible for creating and distributing goods and services—worked better than free market economies where planning and production were done by an undirected, decentralized crowd. M

These include openness, noncredentialism, verifiable and reversible contributions, clear outcomes, self-organization, and geeky leadership.

the same time that they’re doing this work on transactions, the nodes are also involved in a competition with each other, consisting of trying to find a short numeric summary, called a “hash,” of the current block.

applied to just about every other fabrication technique, from cutting glass sheets and ceramic tiles to bending and milling all kinds of metals.

“Schumpeterian,” enabling companies to scale up rapidly and gain dominant market share, but also making it easier for new entrants to supplant them and increase turbulence.

needed to operate entirely independent of them. In fact, it had to operate in a completely decentralized way—unreliant on any core set of organizations or institutions and able to survive and thrive no matter

they make the transmission of an organization work smoothly, and prevent it from seizing up. The second reason

and by using the prices of things not only to balance supply and demand, but also to transmit critical information throughout the economy in a remarkably parsimonious way. As Hayek wrote,

Someone well versed in transaction cost economics and the realities of incomplete contracting might have predicted an outcome like this.