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Center for Blockchains and Electronic Markets

Carlsbergfondets ”Semper Ardens” forskningsprojekter


There is an ongoing development of a new type of Internet, often referred to as Web 3.0, in which various devices trade and set up contracts with each other in a decentralized environment. The infrastructure of the Internet is facing a complete redesign where advanced cryptography is used to verify information, interactions, and transactions without a third party such as a governmental agency, bank, or broker. This is not just a more secure infrastructure, but an economic infrastructure that may change the way that we make decisions and organize the economy in terms of money, banking, ownership, data sharing, and digital interaction. This challenges governments, existing trustees, and corporations across all industries, inherently linking computer science and economics at multiple layers.


Although the development is moving fast, the technology is still in its infancy and there remain significant limitations to overcome in order to unleash its full potential. The Center for Blockchains and Electronic Markets will focus on how to design the digital markets of the future. With a mix of experts in cryptography (Aarhus University) and market design (University of Copenhagen), the center will explore the new technological infrastructure and study the design of secure and economically sound markets that ensure efficiency and stability in a new decentralized economy. The potential gains are huge as automated software agents can solve bottlenecks in most parts of the economy without third party mediators, leading to substantial lowering of transaction and contract enforcement costs.


Using the tools of economics, game theory and cryptography, we study the complex interactions of the three main building blocks of the new technology: the public ledger; smart contracts and decentralized applications; and privacy measures to ensure that private information stays private in a decentralized network. By constructing distributed ledgers that are provably secure and operational (using cryptographic and game theoretic tools), and designing smart contracts and decentralized applications that ensure stable and efficient market outcomes (using mechanism design, normative economics and appropriate privacy measures such as multiparty computation), existing markets can be transformed, and new, currently infeasible, market forms can arise.


To benefit from the creation of new digital markets, it is vital to understand the fundamental ”mechanics” of these market platforms. By focusing on the interactions of infrastructure design and market design related to the blockchain technology, the results of the project will improve our ability to manage vital aspects of the new economy to the joint benefit of industry and society as a whole.