Three fundamental structures govern the nature of all economic activity: consumers, producers, and the way — the mediating infrastructure — in which value is exchanged between them. Traditional organizations, like firms, introduced a central authority and assumed a function of coordination and communication. With high transaction costs present, it was expedient to concentrate those functions within a central authority.

As a result of technological and societal changes, our economies and societies become more decentralized and flexible. With ever lower transaction costs, the Coasean case for large hierarchical, bureaucratic, and rigid organizations is mostly gone. Interestingly, the absence of transaction costs is the necessary precondition for Adam Smith’s “invisible hand”, the idea of trade and market exchange automatically channeling self-interest toward socially desirable ends. Digital and programmable money (smart contracts) based on Distributed Ledger Technology (DLT) like Facebook’s Libra, a cryptographically secure stable coin, will replace complex legal agreements and make the need for a bank account obsolete.