The 2017 paper A Cross-Sectional Overview of Cryptoasset Governance and Implications for Investors is a master’s thesis covering governance structures in the industry. It has a useful survey of the top 50 circulating cryptoassets by network value (as of July 29, 2017) with detailed analysis of the governance models on display. The paper is aimed at educating investors about the relative lack of shareholder (tokenholder) rights in the industry. It also discusses a few of the functioning models of cryptoasset governance.
We theorize about the governance of blockchain organizations and empirically explore the phenomenon using panel data on cryptocurrencies. Our findings point to interesting effects of governance on returns (i.e. cryptocurrency price increases or decreases). Internally, while centralized governance design choices at the blockchain level decrease returns, centralized governance design choices at the protocol and the organizational levels appear to be more beneficial for returns. The results correspond to the idea that, on the one hand, investors value cryptocurrencies’ core value proposition, rooted in decentralization; but on the other hand, are suspicious of decentralized governance at higher levels in the organization because they could slow down strategic decision-making (e.g., regarding the introduction of new innovations) or create information asymmetries between investors and technologists.
Decentralized systems require governance to function well. Ideally this governance should be clear, open, and effective without impacting the decentralized nature of the system. This post describes the governance of the Sovrin network. Our approach is a constitutional model based on an agreement we call the Sovrin Trust Framework that informs and guides everything from code development to the responsibilities of the various actors in the system. The Sovrin Trust Framework enables decentralized governance of the Sovrin network.
Governance in Blockchain Technologies & Social Contract Theories
This paper is placed in the context of a growing number of social and political critiques of blockchain technologies. We focus on the supposed potential of blockchain technologies to transform political institutions that are central to contemporary human societies, such as money, property rights regimes, and systems of democratic governance. Our aim is to examine the way blockchain technologies canbring about – and justify – new models of governance. To do so, we draw on the philosophical works of Hobbes, Rousseau, and Rawls, analyzing blockchain governance in terms of contrasting social contract theories. We begin by comparing the justifications of blockchain governance offered by members of the blockchain developers’ community with the justifications of governance presented within social contract theories. We then examine the extent to which the model of governance offered by blockchain technologies reflects key governance themes and assumptions located within social contract theories, focusing on the notions of sovereignty, the initial situation, decentralization and distributive justice.
A Multistakeholder Approach to the Stewardship of Blockchain and CryptocurrenciesBlockchain, or distributed ledger technology, could soon give rise to a new era of the Internet even more disruptive and transformative than the current one. Blockchain’s ability to generate unprecedented opportunities to create and trade value in society will lead to a generational shift in the Internet’s evolution, from an Internet of Information to a new generation Internet of Value. The key to enabling this transition is the formation of a multistakeholder consensus around how the technology functions, its current and potential applications and how to create the regulatory, cultural and organizational conditions for it to succeed.
Understanding blockchain governance is critical to mitigate social conflict over blockchain protocols and in ensuring they remain functional. The promise of governance by the network – a techno-institutional solution to solving the problems of cooperation and coordination – can only work if the governance of the network is robust, fair and predictable. There is a tendency in the wider blockchain community to dismiss governance issues, and sometimes even to deny that they exist. There are a number of reasons why this is mistaken: social scientists have long known that even in supposedly non-hierarchical social communities, power relations and politics emerge to structure human interaction. Studies of open-source software projects and internet governance, both comparable to blockchains, have demonstrated the existence of governance in these contexts, whether formal or informal. The study of the governance of blockchains need not call for the formalisation and institutionalisation of current practices; instead it should be seen as a necessary step to better understand the current ways in which blockchains are produced, how they change, and how conflicts over their protocols are resolved.
Blockchain refers to a range of general purpose technologies to exchange information and transact digital assets in distributed networks. The core question addressed in this paper is whether blockchain technology will lead to innovation and transformation of governmental processes. To address this question we present a critical assessment of the often exaggerated benefits of blockchain technology found in the literature and discuss their implications for governmental organizations and processes. We plea for a shift from a technology-driven to need-driven approach in which blockchain applications are customized to ensure a fit with requirements of administrative processes and in which the administrative processes are changed to benefit from the technology. Having sound governance models are found to be a condition for realizing benefits. Based on a critical assessment we offer directions for further research into the potential benefits of BC applications in e-government and the role of governance of BC architectures and applications to comply with societal needs and public values.