Democratic Blockchain Design

Journal of Institutional and Theoretical Economics (JITE) 175 (2019), 163-177

Posted: 21 Sep 2019

See all articles by Yoan Hermstrüwer

Yoan Hermstrüwer

Max Planck Institute for Research on Collective Goods; University of Bonn - Department of Law

Date Written: March 1, 2019

Abstract

Democracy requires rules that are designed to prevent the abuse of power and money. Blockchain technology is sometimes heralded as a solution to mitigate the problems associated with voting procedures, such as counting errors, fraud, or the improper use of money to influence the outcome of the collective choice procedure. In this article, I argue that the democratic potential of the blockchain hinges on the specific design of the rules governing the validation of blocks. In support of this argument, I shed light on the governance problems raised by standard protocols such as proof-of-work, proof-of-stake, and on-chain voting.

Keywords: cryptocurrency, blockchain, democracy, market design, constitutional law, behavioral law and economics

JEL Classification: K16, K24, D47, D72, D90

Suggested Citation

Hermstrüwer, Yoan, Democratic Blockchain Design (March 1, 2019). Journal of Institutional and Theoretical Economics (JITE) 175 (2019), 163-177, Available at SSRN: https://ssrn.com/abstract=3453085

Yoan Hermstrüwer (Contact Author)

Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

University of Bonn - Department of Law ( email )

Regina-Pacis-Weg 3
Postfach 2220
Bonn, D-53012
Germany

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