As part of the series of the "Finance Research Seminar", VGSF welcomes Daniel Ferreira from the London School of Economics to present his research paper.
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 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 fi