The Market for Promises

Blockchains are an alternative system for promise enforcement, fundamentally different from any system human history has seen before. Promises in blockchain systems are enforced by miners, who — in reasonably competitive mining markets — have limited ability, and weak incentives, to do anything other than execute others' promises roughly according ... See more

The consequences of the existence of blockchains are thus that, for the first time in human history, we have a real alternative to governments and legal systems for the enforcement of promises. What are the effects this will have on the world?

The modern financial system is a market for promises that involve large degree of trust. Human systems are incapable of executing all promises due to interests and goals that could go against them. The inability to commit to promise enforcement limits the set of promises that can be made. And this is the fundamental problem that blockchain as an al... See more

Financial assets are promises to trade certain things in the future, if certain events happen in the world. The financial system is the market for promises.