School of Business and Management Department of Accounting 171 Cryptocurrency, Blockchain and their Governance Implications Supervisor: HUANG Allen / ACCT Student: ZHANG Zhehan / ECOF Course: UROP 1100, Summer This paper explores the complex relationship between stakeholders' incentives and consensus mechanisms in blockchain networks. It examines various consensus algorithms, emphasizing their impact on the behavior and motivations of participants. The analysis underscores the importance of economic, non-economic, and governance incentives in maintaining network security, stability, and growth. The study also addresses challenges such as centralization and external pressures, offering potential solutions. Additionally, emerging consensus mechanisms are reviewed, with innovative approaches proposed to better align incentives with the long-term success of the network.
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