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7 blockchain benefits according to Don Tapscott

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Transaction costs of doing business drop with blockchain

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Visual Editor: Sarah Evans

Citing Ronald Coase, Tapscott described four transaction costs of doing business as a firm or corporation, which he said prevents everyone from operating as independent contractors: the cost of search in an open market, the cost of coordination, the cost of contracting and the cost of establishing trust. Blockchain technology "will radically drop all four categories of transaction costs. We can think of talent not just being inside our boundaries, but outside. And this is going to lead to radical new models of the firm," he said. "We're convinced that this will rattle the windows and shake the walls of the traditional industrial-age corporation."

Tapscott pointed to musicians being able to post their music on a blockchain system as an example for decreased transaction costs. For these individuals, the cost of doing business could decrease if they are able to include smart contracts that specify the rights associated with use of the music.

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