Regulating Blockchain: Techno-Social and Legal Challenges
A decade into Bitcoin's existence, governance questions around it and other public blockchains abound. Do these 'decentralized' structures even have governance? If so, what does it look like? Who has power, and how is it channeled or constrained? Are power structures implicit or explicit? How can we improve upon the ad hoc governance structures of early blockchains? ls ‘on-chain governance,’ like that proposed by Tezos and others, the path forward?
In August 2016, in the aftermath of the DAO theft and resulting Ethereum hard fork, I argued in American Banker that the core developers and significant miners of public blockchains function as fiduciaries of those who rely on these systems and should, therefore, be accountable as such. The DAO episode provided a gripping real-world demonstration that certain people within nominally decentralized public blockchains were making decisions about other people's money and resources, yet this power was largely unacknowledged, undefined, and unaccountable. In this chapter, I explore in greater depth my claim that certain developers of public blockchains act as fiduciaries, as events since the DAO continue to point to the exercise of power within these systems without corresponding accountability.
Angela Walch, In Code(rs) We Trust: Software Developers as Fiduciaries in Public Blockchains, in Regulating Blockchain: Techno-Social and Legal Challenges, 58-81 (Philipp Hacker, et. al, eds., 2019).