How can blockchain governance drive forward mass adoption?
How do we apply regulation and governance within a blockchain ecosystem?
Regulation isn’t punishment it’s about ‘bring[ing] back public confidence’ President Franklin D, Roosevelt.
Today in Blockchain we see several forms of blockchain governance; Bitcoin uses PoW, Ethereum is adopting PoS, Tezo’s applies a Self-amending Ledger whereas Dfinity applies on-chain voting… forms of governance go on and on.
Ehrsam, (2017) highlights the ‘speed’ of blockchain and ability to learn much quicker and the ‘opportunity to create vastly different power structures’ He goes on to say that it is important to think about the underlying incentives and how coordination is working to validate the strength/fairness of every proposed governance model.
For example, whereas on-Chain incentives and coordination can be seen as fair, quick, and process-driven, it is also challenged by the difficulty to change and its code is open to exploitation or damages.
Pillars of Blockchain Governance
So from this, we could say that governance rests on 3 main pillars:
- Speed
- Incentive
- Alignment
Briefly, we see speed within governance systems have been under the spotlight, where some might prefer the ‘’Measure twice and cut once’’ model whereas others apply the Silicon Valley startup model of ‘’Move fast and break things’’. Both approaches come with pros and cons.
And we already observe alignment and incentive, with forking being the strongest form of governance (Eg. BTC-BCH and then BCH ABC vs BCH SV). With this said, I don’t think forking makes governance stronger, it creates a divide.
‘smart regulation requires coordination between states and a willingness to give up your own preferences’
