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Antitrust and Blockchain Technology: Group Boycotts, the Bitmain case, and the Ethereum “Merge”

 |  December 2, 2022

By: Luis Blanquez (The Antitrust Attorney)

Blockchain is an emerging technology that is already changing the way companies do business. But this doesn’t precludn companies using such nascent technology frot getting caught in the same old anticompetitive practices subject to the antitrust laws.

Before diving into the spectrum of anticompetitive behavior that companies using blockchain technology might get involved, let’s first explain below what distributed ledger technology (“DLT”) and blockchain mean, and what are––at least for now––the different types of blockchains.

In the last section of this article, we also analyze how antitrust group boycotts could apply in a blockchain-setting. And we provide two real life recent examples, the Bitmain case and the Ethereum Merge.

What Is Blockchain Technology?

A “blockchain” is a decentralized, electronic register in which transactions and interactions can be recorded and validated in a verifiable and permanent way. A peer-to-peer network where different users or “nodes” share and validate information in a database or network without the need of a centralized and trusted intermediary.

Records of transactions are stored along with other transactions into blocks of data that are linked to one another in a chain, creating a blockchain, which is a type of distributed ledger technology (“DLT”). Each ledger is tamper-proof and recorded using a consensus verification algorithm that encoded every prior block in the blockchain. Once a block is added to the chain, it is virtually impossible to modify. Any change would require modifying every subsequent block of data on the chain. And because each participant on the blockchain has a unique identification key, other users can instantly verify prior transactions involving that participant…