Defining blockchain governance principles: A comprehensive framework

Abstract

Blockchain eliminates the need for trusted third-party intermediaries in business by enabling decentralised architecture design in software applications. However, the vulnerabilities in on-chain autonomous decision-makings and cumbersome off-chain coordination lead to serious concerns about blockchain’s ability to behave in a trustworthy and efficient way. Blockchain governance has received considerable attention to support the decision-making process during the use and evolution of blockchain. Nevertheless, the conventional governance frameworks do not apply to blockchain due to its distributed architecture and decentralised decision process. These inherent features lead to the absence of a clear source of authority in blockchain ecosystem. Currently, there is a lack of systematic guidance on the governance of blockchain. Therefore, in this paper, we present a comprehensive blockchain governance framework, which elucidates an integrated view of the degree of decentralisation, decision rights, incentives, accountability, ecosystem, and legal and ethical responsibilities. The above aspects are formulated as six high-level principles for blockchain governance. We demonstrate a qualitative analysis of the proposed framework, including case studies on five extant blockchain platforms, and comparison with existing blockchain governance frameworks. The results show that our proposed framework is feasible and applicable in a real-world context.