Accounting and Finance Seminars - Daniel Ferreira (LSE)
2 October 2019, 1.00 PM - 2 October 2019, 2.15 PM
G.15, 15-19 Tyndalls Park Road
Title - Corporate Capture of Blockchain Governance
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.