Why Do Public Blockchains Need Formal and Effective Internal Governance Mechanisms?

17 Pages Posted: 31 Jul 2019

See all articles by Karen Yeung

Karen Yeung

The University of Birmingham

David Galindo

University of Birmingham - School of Computer Science

Date Written: July 27, 2019

Abstract

With the birth and rise of cryptocurrencies following the success of Bitcoin and the popularity of 'Initial Coin Offerings,' public awareness of blockchain technologies has substantially increased in recent years. Many blockchain advocates claim that these software artefacts enable radically new forms of decentralised governance by relying upon computational trust created via cryptographic proof, obviating the need for reliance on conventional trusted third-party intermediaries.

But these claims rest on some key assumptions, which this paper subjects to critical examination. It asks: can existing mechanisms and procedures for collective decision-making of public blockchains (which we refer to as internal blockchain governance) live up to these ambitions? By drawing upon HLA Hart's Concept of Law, together with literature from regulatory governance studies, we argue that unless public blockchain systems establish formal and effective internal governance, they are unlikely to be taken up at scale as a tool for social coordination, and are thus likely to remain, at best, a marginal technology.

Suggested Citation

Yeung, Karen and Galindo, David, Why Do Public Blockchains Need Formal and Effective Internal Governance Mechanisms? (July 27, 2019). Available at SSRN: https://ssrn.com/abstract=3427763 or http://dx.doi.org/10.2139/ssrn.3427763

Karen Yeung (Contact Author)

The University of Birmingham ( email )

Law School and School of Computer Science
Edgbaston, Birmingham B15 2TT
United Kingdom

David Galindo

University of Birmingham - School of Computer Science ( email )

United Kingdom

HOME PAGE: http://https://www.dgalindo.es

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