Corporate Governance on Ethereum's Blockchain

Abstract

New blockchain-based technology allows users to form what's called Decentralized Autonomous Organizations ("DAO"), which can operate similarly to a publicly-traded corporation. Specifically, cryptocurrency holders can replace traditional shareholders, who can then appoint members of a governing body similar to a board of directors. This governing body can then vote to issue currency to an account holder who can then act similarly to a Chief Financial Officer, who can then pay the salaries of executives, employees, and directors. Because this is all done on using the blockchain protocol, these virtual corporations can operate pseudonymously without government intervention using what's called "Smart Contracts" (contracts that execute without human intervention).

Keywords: Blockchain, Bitcoin, Ethereum, Cryptocurrency, Cryptocurrencies, Corporate Governance

JEL Classification: G3