Seminar

Corporate Capture of Blockchain Governance

Radoslava Nicolowa (Queen Mary University)

November 30, 2020, 12:30–13:45

Toulouse

Room Zoom

Finance Seminar

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 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 a large firm captures the governance of the blockchain.