DOI: https://doi.org/10.36719/3104-4735/3/4-7

The Role of Blockchain Technology in Reducing Transaction Costs: An Economic Analysis

Irada Baghirova

Abstract. Transaction costs are considered one of the key factors determining the efficiency of market mechanisms in modern economic systems. Contract enforcement, data collection and verification, trust assurance between parties, and monitoring mechanisms generate additional costs for economic agents. In particular, in the context of global trade and the digital economy, the increase in these costs can limit the efficiency of market operations. In recent years, the rapid development of blockchain technology has created new institutional and technological opportunities to reduce transaction costs. This distributed ledger technology minimizes the need for intermediaries, ensures data immutability, and enhances transparency in economic relations. This paper analyzes the role of blockchain technology in reducing transaction costs based on economic theory and existing scholarly approaches. Within the research framework, the mechanisms through which blockchain technology addresses information asymmetry, automates contract enforcement, and strengthens trust mechanisms are examined. The main objective of this study is to evaluate the potential efficiency benefits of blockchain technology and scientifically demonstrate its strategic importance in reducing transaction costs.

Keywords: Blockchain technology, transaction costs, digital economy, institutional economics, distributed ledger, smart contracts, economic efficiency