Constitutions and Blockchains: Competitive Governance of Fundamental Rule Sets

39 Pages Posted: 22 Apr 2019 Last revised: 22 Dec 2020

See all articles by Eric Alston

Eric Alston

Finance Division, University of Colorado Boulder

Date Written: August 9, 2019


In the context of private ordering—where rule sets are relatively fluid, centrally controlled, and exist in the shadow of law and regulation—developing generalizable insights about comparatively superior governance mechanisms is difficult. I shed light on this question by characterizing cryptocurrency blockchains as a type of constitutional rule set that both defines and legitimizes the activities supported by the underlying distributed ledger technology. More specifically, I argue that cryptocurrency blockchains have led to new forms of competition in private governance, which include exit costs and citizenship rules as important competitive margins. My analysis not only identifies the choices in constitutional governance to which proposed cryptocurrency blockchain changes are analogous, but it also highlights the competitive gains expected to result from these changes. I further consider both the trade-offs in governance created by competition between cryptocurrency blockchains and the surprising ways in which these unique competitive margins may influence downstream outcomes.

Keywords: Blockchain, Constitutions, Private Ordering, Cryptocurrencies, Institutions, Exit Costs, Competitive Governance

Suggested Citation

Alston, Eric, Constitutions and Blockchains: Competitive Governance of Fundamental Rule Sets (August 9, 2019). Case Western Reserve Journal of Law, Technology & the Internet, Vol. 11, No. 4, 2019, Available at SSRN: or

Eric Alston (Contact Author)

Finance Division, University of Colorado Boulder ( email )

Campus Box 419
Boulder, CO 80309
United States

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