Blockchain’s Future: Can the Decentralised Blockchain Community Succeed in Creating Standards?

Abstract

Nakamoto proposed a new solution to transact value via the internet. And since 2009 blockchain technology has expanded and diversified. It has, however, proven to be inefficient in the way it achieves its outcomes, especially through the proof of work protocol. Other developers are promoting alternative methods but, as yet, none has superseded proof of work. The competing protocols illuminate a key feature of the blockchain community, namely, its inability to create consensus in a decentralised community. Because of this lack of consensus the formation of standards is particularly difficult to achieve. We examine three areas where some form of agreement over standards will be essential if blockchain is to evolve successfully. These three areas are blockchain governance, smart contracts, and interoperability of blockchains. We argue that because standards formation is such contested process the blockchain community will persist in creating difficulties for itself until it is able to overcome internal divisions.

Keywords: blockchain, standards, community, consensus, smart contracts, interoperability, governance

JEL Classification: O31, O33