Corporate Capture of Blockchain Governance
56 Pages Posted: 25 Jan 2019 Last revised: 27 Nov 2019
Date Written: October 2019
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: Governance, Blockchain, Industrial Ecosystem, Proof-of-Work
JEL Classification: G30, L13, M20
Suggested Citation: Suggested Citation