Who can change
the rules?

An open network still needs an answer to a basic investment question: who can change the rules after other people have built their businesses around them?

A firm commits equipment, software and specialist staff to a digital network. Its plans assume that the network’s rules will continue to support the service it intends to provide. Years of work may depend on that assumption. Open access makes joining possible; the credibility of the rules helps determine whether joining is worth the investment.

My article, Beyond ‘permissionless’: governance, commitment, and rule change in public blockchains, published in the Journal of Institutional Economics, examines that second question. It places blockchain governance within a familiar economic problem: what happens when people invest in assets tied to a relationship, while someone else retains discretion to change its terms?

Admission and authority are different dimensions

“Permissionless” usefully describes a system in which participation is open under the protocol’s technical conditions. A participant may be able to submit a transaction without obtaining an operator’s permission. That tells us something important about access. It leaves the process for changing the protocol to be examined.

Software changes must be proposed, implemented, released and adopted. Development needs resources. Participants coordinate around particular implementations. Validators, mining pools, foundations, firms or token holders may have roles in making a revision effective. Those arrangements can remain highly consequential even when admission is open.

The article treats the two dimensions separately. It asks how governance operates above the existing transaction rules and who possesses the practical ability to alter them. This makes the institutional structure available for comparison rather than allowing an access label to stand in for the entire system.

Follow the decision pathway

The study compares eight systems: BTC Core, Ethereum, Solana, Cardano, BNB Chain, Uniswap, MakerDAO and Tezos. The selection brings different governance forms into view, including proof-of-work, proof-of-stake, foundation-led development and token-weighted voting. It is an illustrative institutional comparison, rather than a representative estimate of the whole blockchain population.

The audit follows observable mechanisms. Who controls changes entering a widely used implementation? Who funds development and sets priorities? Which actors are needed for adoption? How do activation procedures distribute coordination burdens? Where votes are weighted by tokens or delegated holdings, how is effective voting authority organised?

These questions produce a more informative picture than counting participants alone. A large population of users can coexist with a much smaller group whose agreement is critical to a change. Different systems distribute that authority differently; the shared finding is that the governance layer remains present.

The investment changes the bargaining position

The economic mechanism begins with specificity. Equipment, facilities, expertise and applications can be valuable within a particular protocol while being costly to move elsewhere. Before investing, a participant may compare competing systems. After investing, its choices are constrained by the resources it has already committed.

If a coalition can revise the relevant rules at that point, it can change the conditions under which those resources earn a return. This is the connection to transaction-cost economics and the hold-up problem. The paper applies that framework to technical infrastructure: the exposure comes from the combination of specific investment and discretion over the rules.

Cryptographic enforcement answers whether actions comply with the rules currently in force. Governance determines which rules become operative. A security analysis concerned with long-term commitment therefore needs to examine both. The governance question remains even when enforcement of the current rule set is technically effective.

Stable foundations can support change above them

The article uses TCP/IP as an institutional comparator. Its interest is the relationship between a stable base and the innovation built around it. Extension mechanisms, interoperability requirements and coordination across many independent operators can allow extensive technical development while constraining unilateral revision of foundational semantics.

The proposed lesson for blockchain is architectural and institutional. A credible commitment depends on where change occurs, who can coordinate it and what constrains that authority. Stability can be supported by dispersed decision rights, multiple implementations, transparent processes, reputational exposure and the costs of coordinating revision.

Literal impossibility of change is not the standard. The relevant question is whether economic actors can reasonably plan around a commitment because later discretion faces meaningful constraints. The article describes this as base-layer fixedness: a credibility property sustained by institutions as well as code.

A crisis makes the trade-off visible

The Ethereum DAO intervention provides an acute case. Following the 2016 exploitation of the DAO, a coordinated hard fork altered the ledger state to return funds to investors. Participants rejecting that intervention continued on Ethereum Classic. The episode exposes a choice between correcting a particular outcome and maintaining expectations about finality.

The paper also examines BTC Core governance and activation processes. It separates documented governance arrangements and funding relationships from contested claims about why particular decisions were made. The case material supports institutional diagnosis; causal allegations of sponsor capture require evidence beyond those observed relationships.

Exit matters in both settings. A fork can preserve an alternative rule path, but economic continuity also depends on liquidity, applications, infrastructure and developer attention. Assessing commitment therefore requires examining the practical value retained by those who leave, alongside their formal ability to run different software.

Choose the commitment that fits the transaction

Stability and adaptability serve different needs. Where design uncertainty dominates, room to revise can be valuable. Where the main exposure is discretionary change after substantial investment, stronger constraints can support confidence. Identifiable decision-makers may face greater accountability, while also becoming more exposed to external pressure. The article keeps these trade-offs explicit.

For institutional decision-makers, the research suggests a concrete assessment: identify the rules on which investment depends, map the actors required to change them, examine the implementation and funding pathways, and evaluate the consequences of revision and exit. These are questions about the durability of an operating relationship.

The contribution joins distributed systems, institutional economics and governance analysis around one practical issue. Digital infrastructure is an environment in which people make commitments. Understanding how its rules can change helps explain the risks they bear, the confidence they can place in the system and the institutions needed to sustain investment over time.