What is Blockchain Governance? Complete Beginner’s Guide Posted on : Sep 21 - 2018

Blockchain networks, specifically public blockchains, exist as decentralized networks that need to maintain byzantine fault tolerance to retain authenticity. This is not only difficult in itself but requires novel forms of distributed governance to achieve long-term sustainability of the network as a whole, balancing human intuitions and algorithmic governance.

Governance of blockchains is one of the more fascinating and complicated topics in the space. Which blockchain networks can adapt, and how they adjust, will be vital to shaping the future landscape of the industry.

The Current Governance Structure

Blockchains aside, it is worth evaluating how governance functions within major institutions and the Internet today to help give decentralized governance some context.

Governance has historically been and, likely will continue to be, a polarizing topic. The authority afforded federal governments, centralized tech companies, mainstream media outlets, and other influential institutions has continually been at the forefront of news and debate.

Government models of authority and power typically take decades, if not centuries to form and often grow parallel to cultural changes. The rise of powerful tech companies like Amazon, Google, Apple, and Facebook has happened so quickly that it is hard to gauge a precedent for their dominance, particularly considering their dominance is over the Internet, a completely novel medium of communication. The increasing addiction of people to screens further gives media organizations similar power in dispersing information to the public.

Out of these institutions, what are their shared governing tenets and how do they apply to blockchain networks?

In relation to the subsequent section on blockchain governance, we can break down the governance of current institutions into roughly 4 categories:

1. Consensus
2. Incentives
3. Information
4. Governing Structure

While governance is more nuanced — especially taking social/economic considerations into account — analyzing governance through the above categories applies aptly to blockchains.

Consensus typically takes the form of hierarchical centralization in traditional governance. The US is a representative democracy comprised of elected representatives that represent larger voter interests. Companies like Facebook and Twitter operate as centralized hierarchies with top-down power structures. The consensus in these models comes about through agreement through refined groups of individuals rather than direct democracies, an important consideration. Although consensus among the US Congress is often frustratingly challenging to achieve, it is effective in mitigating conflicts that would otherwise arise without representative democracy. View More