AUTHOR=Berg Chris , Davidson Sinclair , Potts Jason 

TITLE=Proof of Work as a Three-Sided Market

JOURNAL=Frontiers in Blockchain

VOLUME=3

YEAR=2020

URL=https://www.frontiersin.org/journals/blockchain/articles/10.3389/fbloc.2020.00002

DOI=10.3389/fbloc.2020.00002

ISSN=2624-7852

ABSTRACT=<p>Blockchain technology is the distributed ledger technology underlying Bitcoin and other cryptocurrencies. We apply Oliver Williamson's transactions cost analysis to a proof of work blockchain consensus mechanism. Blockchains reduce the costs of opportunism, but are not “trustless.” We show that blockchains are trust machines. Blockchains provide for three-sided bargaining that convert energy-intensive computation into economically-valuable trust in a proof of work context.</p>