The Implications of Blockchain for Income Inequality

Income inequality has emerged as one of the more pressing economic, social and political topics of our time. Many factors have been cited in the economics literature as determining the degree of inequality observed in developing countries, with technological innovations commonly cited as a major issue. This paper contributes to the literature by examining the potential impacts of distributed ledger technologies upon income inequality. Drawing upon recent intellectual developments in complexity, evolutionary and network sciences, we identify the processes through which the onset of blockchains may affect income distributions in multiple ways. Given the elevation of inequality as a normative concern in an economic policy context, we also consider the appropriateness of public policy responses to the propagation of blockchain. We argue that policy considerations in this area must carefully weigh trade-offs between inequality versus other matters held to be of great importance, such as the capacity of blockchain to reduce intermediation costs, promote coordination and facilitate institutional discoveries