Discussion paper

DP13493 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.


Ferreira, D, J Li and R Nikolowa (2019), ‘DP13493 Corporate Capture of Blockchain Governance‘, CEPR Discussion Paper No. 13493. CEPR Press, Paris & London. https://cepr.org/publications/dp13493