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 :

January 29 2019
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 two-way 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 the governance of the blockchain is captured by a large firm.
 

Authors

Real name:
Jin Li
Real name:
Radoslawa Nikolowa