Collusion Risk and Responsibility in Public Cryptocurrency Protocol Development
21 Pages Posted: 3 May 2019 Last revised: 10 May 2019
Date Written: March 18, 2019
Cryptocurrencies are based on cryptography-based asset disposals broadcasted peer-to-peer to be validated in a decentralized way according to consented protocols. The cryptocurrency protocols offer the participants various mechanisms for decentralized validation protecting the integrity of the transactions without trusted third parties. Public cryptocurrencies are also decentralized when it comes to protocol development. However, fewer formal decentralized mechanisms are offered when it comes to protecting the integrity of such development. Protocol development is associated with risks, and there are conflicts of interests. Collusion may exacerbate such risks. This paper explores collusion risks and associated responsibilities. Responsibility gives some, but not sufficient, protection against such risks. Additional policies to mitigate risks are discussed.
Keywords: Algorithms, Blockchain, Cryptocurrencies, Collusion, Open Source, Risk, Responsibility
JEL Classification: E42, G28, K21, K24
Suggested Citation: Suggested Citation