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Corporate Capture of Blockchain Governance

Author

Listed:
  • Daniel Ferreira

    (London School of Economics, CEPR and ECGI)

  • Jin Li

    (Hong Kong University, CEP)

  • Radoslawa Nikolowa

    (Queen Mary University of London)

Abstract

We develop a theory of blockchain governance. In our model, the proof-of-work system, which is 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 two-way interactions between blockchain governance and the market structure of the industries in the blockchain ecosystem. Our main result is that the proof-of-work system leads to a situation where the governance of the blockchain is captured by a large firm.

Suggested Citation

  • Daniel Ferreira & Jin Li & Radoslawa Nikolowa, 2019. "Corporate Capture of Blockchain Governance," Working Papers 880, Queen Mary University of London, School of Economics and Finance.
    • Handle: RePEc:qmw:qmwecw:880
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Governance; Blockchain; Proof-of-Work; Industrial Ecosystem;
    All these keywords.

    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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