The foundation and decision-making of blockchain governance

Regarding the issue of blockchain governance, there is a lot of confusion. Many participants and potential participants inside and outside the blockchain industry have failed to effectively participate in blockchain governance. I hope that this situation will improve as the public gains more understanding of the basic knowledge of blockchain governance, possible governance results, and how they can effectively participate in blockchain governance.

I don't know all the answers, and I also understand that I lack relevant background knowledge. However, I have been thinking, observing and actively participating in blockchain governance, and the relevant time has been 3-4 years. I feel that I need to share some of my current views, even though my research on this topic is still in progress.

I am not going to define what blockchain governance is, but I will discuss the things you need to pay attention to when considering blockchain governance. I like to apply general governance concepts to blockchain governance. So first I need to talk about governance:

1. The basis of governance

Generally speaking, governance is about decisions that ultimately affect people (people call them "stakeholders"). This is about the decision-making process of governance participants. This is also about how they coordinate the decision-making and decision-making process. It includes establishing, maintaining, and revoking the legitimacy of decision-making, decision-making processes, specifications, and other coordination mechanisms.

Although the above paragraph contains some key terms, I only want to discuss the topic of legality. I believe that if a decision-making, decision-making process or coordination mechanism has a certain common understanding among governance participants, then they are "legitimate."

The important point is this: if a coordination mechanism is legal, people will (unarguably) act as if it is like a fact and people will use it. When a decision is legal, people don’t need to worry about whether others will implement it, they can be confident that others will do it. On the other hand, if it is illegal, it will show that people will not use it. I believe that establishing a legal decision-making, decision-making process, and coordination mechanism is a clear and elegant way to solve coordination problems.

Therefore, when I say governance is about the establishment, maintenance and revocation of legality, what I mean is that it is about how people collectively coordinate to implement what decisions, what processes to use, what norms to have and what mechanisms to use in the coordination process .

The process of legalizing things is a coordination problem. When different participants want to coordinate around the results of competition, it may be highly politicized. In my opinion, politics is a coordinated "game" between governance participants. They use voting to express their preference for possible outcomes, so that everyone can coordinate on the outcome they like, whether it is For A): make decisions that cannot be made by existing legal procedures, or B): establish, maintain, and revoke the legitimacy of decision-making, decision-making processes and coordination mechanisms;

In my experience, most of the work of governance is playing politics, and I think all these discussions are directly related to blockchain governance. Blockchain is governed, and the result of blockchain governance will be driven by the politics of participants in the public blockchain industry.

2. The foundation of blockchain governance

This section contains two parts. The first part describes that decision-making is basically a part of blockchain governance (because of the nature of the blockchain), and the second part is about "forking."

2.1: Decisions in blockchain governance

Blockchain is a distributed system, which is basically a consensus protocol, which means that different nodes in the network (for example, computers on the Internet) must run compatible software. This is like truly compatible software.

Blockchains usually have "blockchain communities" that depend on them and are responsible for managing blockchain protocols.

The "node operator" is the owner and manager of the node that runs the protocol. Most node operators do not want to write too much software, and it is a technical challenge for anyone to independently write a compatible implementation of any consensus protocol. Therefore, node operators rely on software repositories (usually hosted on Microsoft/Github servers) to provide them with the software they choose to run. The "core developers" of the blockchain refer to software developers who are committed to implementing the protocol. Developers should guarantee the quality of the software they publish, and are usually very interested in maintaining the legitimacy of their software library, because developers want to see people use their software (rather than other people's software).

Blockchains are usually related to trademarks, and trademarks are not necessarily registerable, but the blockchain community will use trademarks to promote their blockchains and make it easy for users to identify which blockchain they are interacting with.

For a community that successfully manages the blockchain, members need to coordinate. At the very least, this means that there must be coordination among node operators, developers, and trademark users.

Blockchain can have a large community, in which there will be a variety of ecosystems, including many participants and stakeholders who are not core developers, node operators, and trademark users. These stakeholders may include blockchain browsers and other service providers, exchanges, speculators, application developers, users, journalists, and passive observers (just to name a few). On the other hand, the blockchain community may also be just a core development team running its own nodes, and they hope that one day a larger community will accept their agreement.

This involves decisions that blockchain governance will inevitably encounter: core developers must choose how to release software, node operators must decide what software to run, and trademark users must decide how to use blockchain trademarks. But it is worth noting that these decisions do not involve any process, norms, coordination mechanism and politics (for any large blockchain community, it is inevitable).

2.2: Bifurcation phenomenon in blockchain governance

Blockchain has a network effect, and the blockchain community generally prefers to stay together rather than fork. However, because the blockchain is a software network that relies on the Internet, some communities that question the legitimacy of governance decisions can copy the blockchain network (and the corresponding software repository) and maintain a division different from the original chain’s governance rules. Fork chain. Among them, Bitcoin Cash (BCH) and Ethereum Classic (ETC) are classic cases of blockchain forks.

The so-called fork is actually a coordination problem. Participants may have like-minded allies who will choose the same fork chain.

As a general rule, I think that forking a blockchain is actually much easier than forking a nation-state, but it is much harder than forking Linux. Another general rule is that there is a "power-law distribution" rule, in which most blockchains have relatively small communities, and a few blockchains have relatively large communities.

This "power-law distribution" rule means that even if forks are very possible, in the end only a few forks can be successfully considered as "mainstream blockchains." Therefore, the governance mechanism of a few mainstream blockchains will determine the governance results of the entire blockchain industry.

These results are at stake for any participant in the blockchain industry (and those who may be affected by blockchain technology in the future). This is why we need to pay attention to the blockchain governance of every mainstream public chain (existing or just with potential).

Three, five ways of blockchain governance

Blockchain governance is still a new thing, so there are still various possible outcomes. Because these results may have a significant impact on people's lives, and because people have different interests, the results of blockchain governance will also be political results.

I will share five possible blockchain governance methods to portray some political landscapes. These scenarios are not completely mutually exclusive, but they are the unique vision of blockchain governance in the future.

3.1: Autonomous blockchain

In the future prospects of blockchain governance, blockchain governance essentially does not need to do other things except to ensure that the blockchain continues to operate in accordance with the predetermined protocol rules. This is accompanied by a specification: unless absolutely necessary, the agreement should not be changed.

In this governance result, in almost any case, the only legal decision is to allow the agreement to remain unchanged. The attraction of this governance model is that it minimizes the cost of coordination around governance agreements by minimizing the amount of governance. It solves the problem of blockchain governance by eliminating any decisions made to the maximum.

But the disadvantage of this approach is that blockchain governance will not be responsible for the harm caused by the use of the blockchain, whether it is unintentional or caused by malicious actors.

3.2: Leading Blockchain Governance Capture (Blockchain Governance Capture)

In this case, blockchain governance will be dominated by the existing governance system. I will briefly describe four leading examples:

·Company dominance: that is, blockchain governance is carried out through the company's legal person governance structure, and thus becomes the only source of the legitimacy of blockchain governance.

·State-led: Mainly dominated by regulatory agencies and courts in the jurisdiction. For example, one day "Ether America" ​​can implement US economic sanctions, "Ether Europe" can implement GDPR, and "Ether XX" can implement capital control policies.

Developer-led: Dominated by the core developers of the blockchain, their software development process has become the only source of legitimacy in blockchain governance.

Cartel dominance: Blockchain governance led by cartel participants (for example, node operator cartel or coin holder cartel).

In this scenario, the blockchain governance process and specifications are determined by the governance specifications and processes of the dominant entity. In this case, the dominant entity has control over all important sources of blockchain governance decisions.

The attraction of this governance scenario is that dominance is what we are used to, and this approach will benefit from the governance legitimacy, flexibility, and maturity of the dominant entity. The disadvantage is that the decisions made by the dominant blockchain governance may only represent the interests of the parties, and are not necessarily affected by other stakeholders.

3.3: Censored Blockchain Governance

In this case, the main jurisdiction does not allow its public to touch or access the public blockchain, but instead prohibits and censor the blockchain that does not comply with local regulations.

The attraction of this approach is that it allows local governments to maintain sovereignty and gives local governments more control over the public's use of international blockchains. For example, this may be due to factors such as consumer protection, privacy and data protection, or prevention of infringement of intellectual property rights. Then, they may find that the censorship system is an effective way to prevent circumvention.

The main disadvantage of this idea is that it comes at the cost of people's free access to the global public Internet. In addition, it also rejects any benefits that may be gained from using the global public chain. Technically speaking, if you do not review the access of unknown IP, it is difficult to review the access of the public chain, because this requires in-depth group inspection. At the same time, the censorship system is not perfect, because anyone with sufficient motivation, knowledge, and resources can circumvent the censorship system in most jurisdictions.

3.4: Governance through public international law or diplomacy

In this possible blockchain governance result, the public chain is governed by traditional international legal institutions. This can be an entity selected or formed by the United Nations, or an entity established through multilateral agreements between countries.

The attraction of this approach is that it has the potential to actively manage publicly accessible global public blockchains while avoiding many of the shortcomings of autonomous blockchain governance. The downside is that in some jurisdictions, it may be more difficult to legitimize the international governance structure, and it may be more difficult to reach a multilateral agreement on the means of monitoring objectives and implementing provisions. This situation will require countries to enforce blockchain governance decisions on a global scale. If the decisions are not popular locally, then this will be challenging.

3.5: Governance through international private cooperation organizations

In this case, blockchain governance will be under the responsibility of a public-facing global blockchain governance system, which can be promoted by a coalition of private individuals, companies, and non-governmental organizations. It can be said that this is also the governance method of the Internet today, which is jointly governed by institutions such as ICANN, IETF, WC3, and IGF.

The attraction of this method is that it allows the global public chain to be accessed by the global public while avoiding many of the shortcomings of autonomous software. It may gain a lot of legitimacy because it is a governance method involving multi-stakeholder participation. The disadvantage of this scenario is that the system may be difficult to make decisions because it brings together a wide range of stakeholders with different interests, and because of the lack of international legal institutions, it is actually difficult to enforce governance.

Each of the above types of blockchain governance is possible, and it is still unclear what blockchain governance will look like in the future, at least for me.

I encourage everyone to think about how these scenarios will have an impact, and I also encourage you to doubt my assumptions and put forward your own views on blockchain governance.

Then, if these results are very important to you, then I encourage you to participate in blockchain governance by participating in coordinated political actions to avoid the results you want to avoid and bring the results you want to see.

Fourth, how to participate in blockchain governance

Show your preference for blockchain governance (they are your political inclinations, and the future of blockchain governance will be the result of politics).

Understand the political preferences of other people in the same ecology, ask them to clarify their positions, and encourage them to publicly express their political preferences (if they have not already). Determine which blockchain communities are dominated by what political orientations and see if they tend to be in the direction you want. Then find your political allies.

Try to convince people to align with your blockchain governance vision.

You should do this both in public and in private, and try to understand your political opponents and their strategies.

The politics of the blockchain community will directly and immediately affect the blockchain governance of the community.

Participants in blockchain governance cannot ignore their political environment. Core developers cannot ignore, nor can node operators. The legitimacy of their decision-making and decision-making process depends on the political reality of their blockchain community.

Therefore, do your best to prevent results you don't want to see. You can do this via your laptop or mobile phone, please express your preference.

Now, blockchain governance is still in a very early stage, and your personal interest expressed can have a significant impact on the future of the blockchain industry.

Attached survey results: (1-5 represents the degree of preference, 1 represents the most annoying, 5 represents the most favorite)

The foundation and decision-making of blockchain governance

(Figure 1: Governance through international private cooperation organizations)

The foundation and decision-making of blockchain governance

(Figure 2: Autonomous blockchain governance)

The foundation and decision-making of blockchain governance

(Figure 3: Leading blockchain governance)

The foundation and decision-making of blockchain governance

(Figure 4: Governance through public international law or diplomacy)

The foundation and decision-making of blockchain governance

(Figure 5: Censored Blockchain Governance)

It can be seen that "autonomous blockchain" and "governance through international private cooperation organizations" are the most popular blockchain governance methods. what is your viewpoint?

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