Governance and control in distributed ledgers: Understanding the challenges facing blockchain technology in financial services

Towards a Theory of Digital Network De/centralization: Platform-Infrastructure Lessons Drawn from Blockchain

“…The hacking and bankruptcy of the DAO and the implications that this event had for the underlying Ethereum blockchain network has fostered what is probably the most interesting and prolific strand of critiques to the assumption of decentralization. An increasing amount of recent works have focussed on the governance of blockchain networks and on their inherent problems and failures (Arrunada, 2018;De Filippi and Loveluck, 2016;Dupont, 2018;Finck, 2019: chapter 8;Hsieh et al, 2018;John and Pam, 2018;Miscione et al, 2018 andMusiani et al, 2018;Reijers et al, 2016;Walch, 2015 andZachariadis et al, 2019;Ziolkowski et al, 2019). These works have mainly compared the problems emerging from blockchain governance to the governance of digital platforms and, especially, of digital infrastructures.…”

“…This governance conundrum is not limited to the Ethereum community. Many other blockchain communities are currently experiencing "governance crises" derived from the need to update and change their respective protocols in response to a variety of urgent and pressing issues, such as: 1) ensuring sufficient performance when scaling the network; 2) ensuring that the blockchain consensus mechanism can resist the advantages of ASIC mining equipment; 3) the environmental impact of cryptocurrency mining; 4) the interconnection and interoperability of different blockchain networks, and 5) the privacy in exchange of tokens (for a similar list of challenges, see Zachariadis et al, 2019). This has fostered an emerging fierce debate over the meaning and the nature of blockchain governance much beyond academia, and even among the various members of these communities (Buterin, 2017b and.…”

“…Standards examples of this case are the decision to invalid certain coins that have been stolen or counterfeits in order to punish those holders that broke a social rule, or a decision to put some coins out of circulation as they belong to an old social order that is not recognised any more (for instance a fork). The case of the hacking of the Distributed Autonomous Organization (The DAO) investment fund is a very well-known example (Zachariadis et al, 2019). Here, the Ethereum community and its funders decided to invalidate and nullify the value of all the stolen coins.…”

“…A good source could be one of the books by DuPont (2019), Burniski & Tatar (2017), Lacity (2019), or Tapscott & Tapscott (2017). There are also brief introductions in the articles by colleagues (2018, 2019), , or Zachariadis et al (2019). The Internet also has plenty of articles and videos to assist if necessary.…”

“…Although an increasing number of papers on blockchain governance is emerging especially, but not exclusively, in the legal literature, there is still a paucity of conceptual and theoretical works on blockchain grounded within management and Information Systems. Current exceptions are and Zachariadis et al's (2019) papers on blockchain governance, along with practitioner-oriented papers on corporate blockchain arrangements Beck et al 2019;Lacity et al, 2019).…”