Blockchain Development and Fiduciary Duty

Abstract

This article is legal literature’s first detailed analysis of the operations and incentives involved in public blockchain development. We characterize the governance structures of public blockchain network participants and describe the cryptocurrency-based incentives aimed to align the motivations of network participants. We dissect the governance process of development to examine whether fiduciary obligations should be imposed on core developers for the benefit of owners of assets created through these networks. Our findings offer a foundational understanding of public blockchain and open source development for legal scholars, economists, and policymakers about the roles played by developers. This understanding will guide the creation of effective liability frameworks for public blockchain and open source innovation.

Keywords: blockchain, fiduciary, open source, liability, fintech, bitcoin