Warum ist Blockchain Governance benötigt?

Sep 09, 2019

Why blockchain governance is needed?

All global things we use are under governance. Like currencies, media, gasoline. Transnational companies like Apple, Samsung, Louis Vuitton, etc. are under the direction.

It used to be a system free of governance, but now it's time to change the game. It may seem disappointing because of the lack of freedom alongside governance. But we have to go through popularizing blockchain, making it a tool that will be implemented in our daily life. If the government can't control something, it prohibits the thing. So we just need to reassure and understand the need for blockchain governance.

Blockchain governance will be nothing like governance in transnational companies. Blockchain under the leadership becomes as transparent and decentralized as possible. It will be a new form of governance, we must welcome the latest technologies in our daily lives.

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Who rules blockchain?

doesn't have a one-size-fits-all governance strategy because it's a new technology. But what we know for sure is decentralized. So in the blockchains, the participants put their movements in the decision-making process. In some governance strategies, participants are the only decision makers. Some blockchains like Ethereum have a less conventional approach to governance.

If the part of the community disagrees with the decision, forks begin to appear. and were created because of the hard forks.

The hard fork appears when two different opinions are among the majority of users. Or, if many users get into trouble, how it happened with DAO contracts. In short, the hacker found a hole and stole 3.6M ETH. To reverse these losses, the Ethereum community made a fork.

Blockchain governance strategies

So there are some governance strategies. We'll start disclosing democratic less democratic.

As you can see, the blockchain governance strategies differ. The only same thing about them is an influence on the decision-making process. And control over the blockchain.

Off-chain governance

Off-chain governance is more centralized than on-chain management and open governance. It's more traditional governance, like in transnational companies. Cryptocurrencies with an established idea and the use of infrastructure off-chain governance. They try to balance the impact of users, mining, core developers and business units.

Off-chain governance does not include mainstream decision-makers. So only people are able to handle the technical and management requests. Typically, the decision-making team will lead tech developers. Owner and inventor of the blockchain are included. Regular people only use the blockchain, don't handle the decisions.

This governance is based on the GDP proposal transaction mechanism. It is not centralized as traditional government structures. It is still so transparent and should be decentralized as a blockchain. Influencers on decision making have enough awareness of the big picture to make rational decisions.

On-chain governance

On-chain governance, as opposed to the off-chain one, is 100% democratic. As a new version of management, specifically for the blockchain, it amazes. On-chain governance is possible thanks to blockchain built-in voting mechanisms. Many of the chain versions of governance started before or as prototypes only existed when we wrote this article.

So, the first challenge for us is the complexity of the administration itself. From the history of the world, we know that governance models take a long time to develop. Every governance model we know has been established through trial and error method. Existing governance models have been developing for centuries. While the blockchain itself has been around for a decade. Democracy like governance models of adaptation for the blockchain is a challenge.

Onchain governance transfers the power of developer decision-making to miners and users. Users can only vote on the built-in voting mechanisms for decisions. But we know, again from history, that democracies tend to fail when the number of people in a group is extensive. It happens because of the selfish and emotional nature of most people.


Let us now move from theory to practice. We talked a lot about the governance models in the blockchain. Let us reveal the key examples of solutions to the blockchain governance problem. We stopped on three of them.


Governance is what blockchain needs. The whole blockchain ecosystem cannot exist in anarchy. But the truth is that all of the governances for all systems we have been building for centuries have been built.

The challenges facing the crypto community is now about adapting some existing blockchain governance. Or to invent a whole new governance model. We can see how companies, and. They are trying to make blockchain governance more democratic. So the system maintains the highest degree of decentralization.

From the other side we see Ethereum, where all decisions are made by Vitalik Buterin. And yet nobody knows which is better. Is there a governance model that fits the peculiarities of the blockchain? It is still an open question. Maybe you could invent one?