Corporate Capture of Blockchain Governance

Corporate Capture of Blockchain Governance

Daniel Ferreira, Jin Li, Radoslawa Nikolowa

Series number :

Serial Number: 
593/2019

Date posted :

February 04 2019

Last revised :

March 27 2020
SSRN Share

Keywords

  • governance • 
  • blockchain • 
  • Industrial Ecosystem • 
  • Proof-of-Work

We develop a theory of blockchain governance. In our model, the proof of work system, which is the most common set of rules for validating transactions in blockchains, creates an industrial ecosystem with specialized suppliers of goods and services. We analyze the interactions between blockchain governance and the market structure of the industries in the blockchain ecosystem.

Our main result is that the proof-of-work system leads to a situation where a large firm captures the governance of the blockchain.
 

Authors

Real name:
Jin Li
Real name:
Radoslawa Nikolowa