Blockchain Governance: What we can Learn from the Economics of Corporate Governance

Abstract: Understanding the complexities of blockchain governance is urgent. The aim of this paper is to draw on other theories of governance to provide insight into the design of blockchain governance mechanisms. We define blockchain governance as the process by which stakeholders (those who are affected by and can affect the network) exercise bargaining powers over the network. Major considerations include the definition of stakeholders, how the consensus mechanism distributes endogenous bargaining power between those stakeholders, the interaction of exogenous governance mechanisms and institutional frameworks, and the needs for bootstrapping networks. We propose that on-chain governance models can only be partially utilised because of the existence of implicit contracts that embed expectations of return among diverse stakeholders.

Author(s): Darcy W. E. Allen, Chris Berg

Journal: The Journal of the British Blockchain Association

Vol: 3 Issue: 1 Year: 2020

DOI: 10.31585/jbba-3-1-(8)2020

Cite: Allen, Darcy W. E., and Chris Berg. “Blockchain Governance: What We Can Learn from the Economics of Corporate Governance.” The Journal of the British Blockchain Association, vol. 3, no. 1, 2020.

Continue reading “Blockchain Governance: What we can Learn from the Economics of Corporate Governance”