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Corporate Capture of Blockchain Governance

Daniel Ferreira, Jin Li and Radoslawa Nikolowa ()

No 13493, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: 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.

Keywords: blockchain; governance; Industrial Ecosystem; Proof-of-Work (search for similar items in EconPapers)
JEL-codes: G30 L13 M20 (search for similar items in EconPapers)
Date: 2019-01
New Economics Papers: this item is included in nep-bec, nep-com, nep-ict and nep-pay
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