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Corporate Capture of Blockchain Governance

Author

Listed:
  • Daniel Ferreira
  • Jin Li
  • Radoslawa Nikolowa
  • Itay Goldstein

Abstract

We develop a theory of blockchain governance. In our model, the proof-of-work system, the most common set of rules for validating transactions in blockchains, creates an industrial ecosystem with specialized suppliers of goods and services. We analyze the interactions between blockchain governance and the market structure of the industries in the blockchain ecosystem. We show that the proof-of-work system may lead to a situation in which some large firms in the blockchain industrial ecosystem—blockchain conglomerates—capture the governance of the blockchain.Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

Suggested Citation

  • Daniel Ferreira & Jin Li & Radoslawa Nikolowa & Itay Goldstein, 2023. "Corporate Capture of Blockchain Governance," The Review of Financial Studies, Society for Financial Studies, vol. 36(4), pages 1364-1407.
    • Handle: RePEc:oup:rfinst:v:36:y:2023:i:4:p:1364-1407.
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    File URL: http://hdl.handle.net/10.1093/rfs/hhac051
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    More about this item

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • M20 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - General

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