Decentralized Network Governance: Blockchain Technology and the Future of Regulation

Abstract

The advancements in the digital domain, for example Blockchain technology, Big Data and machine learning, are increasingly shaping the lives of individuals, groups, organisation, and societies. These developments call for effective governance to protect the basic interests and needs of individuals and groups. Simultaneously, the very nature of governance is changing. Increasingly, policy-making moves away from top-down governance by the state towards more horizontal modes of governance. This paper reviews the literature on governance theory in order to conceptualise governance as a mode of decentralized networked regulation. The paper will argue that dominant modes of governance are inadequate to describe governance in the digital domain and are poorly equipped to conceptualize novel forms of governance such as decentralized autonomous organizations (DAOs). Therefore, a novel mode of governance is proposed based on the regulation of new power relationships between the state and actors in the digital domain. This model further explores the role that Blockchain can play in what we term decentralized network governance.

Keywords: Blockchain, Governance, Networks, Decentralized Autonomous Organizations

JEL Classification: Y80