Governance
Summary
Blockchains are distributed systems. They are essentially consensus protocols, which means that different nodes in the network (e.g. computers on the internet) have to be running compatible software.
“Node operators” are the owners and managers of nodes that run the protocol. Most node operators don’t want to write much software, and it’s a technical challenge for anyone to independently write compatible implementations of any consensus protocol even if they have a specification. As a result, node operators rely on software repositories (usually hosted on Microsoft/Github servers) to provide them with the software they choose to run.
“Core developers” of a blockchain are software developers who work on the software that implement that protocol. Developers have processes that are supposed to assure the quality of the software they release, and are generally very interested in maintaining the legitimacy of their software repositories because they want to see people using their software (as opposed to someone else’s).
Critical Components of Governance
1. Incentives
Each group in the system has their own incentives. Those incentives are not always 100% aligned with all other groups in the system. Groups will propose changes over time which are advantageous for them. Organisms are biased towards their own survival. This commonly manifests in changes to the reward structure, monetary policy, or balances of power.
2. Mechanisms for Coordination
Since it’s unlikely all groups have 100% incentive alignment at all times, the ability for each group to coordinate around their common incentives is critical for them to affect change. If one group can coordinate better than another, it creates power imbalances in their favor.
In practice, a major factor is how much coordination can be done on-chain vs. off-chain, where on-chain coordination makes coordinating easier. In some new blockchains (such as Tezos or Polkadot), on-chain coordination allows the rules or even the ledger history itself to be changed.
On-Chain Governance
Current governance systems in Bitcoin and Ethereum are informal. They were designed using a decentralized ethos, first promulgated by Satoshi Nakamoto in his original paper. Improvement proposals to make changes to the blockchain are submitted by developers and a core group, consisting mostly of developers, is responsible for coordinating and achieving consensus between stakeholders. The stakeholders in this case are miners (who operate nodes), developers (who are responsible for core blockchain algorithms) and users (who use and invest in various coins).
What is on-chain governance?
On-chain governance is a system for managing and implementing changes to cryptocurrency blockchains. In this type of governance, rules for instituting changes are encoded into the blockchain protocol. Developers propose changes through code updates and each node votes on whether to accept or reject the proposed change.
How does it work?
Unlike informal governance systems, which use a combination of offline coordination and online code modifications to effect changes, on-chain governance systems solely work online. Changes to a blockchain are proposed through code updates. Subsequently, nodes can vote to accept or decline the change. Not all nodes have equal voting power. Nodes with greater holdings of coins have more votes as compared to nodes that have a relatively lesser number of holdings.
If the change is accepted, it is included in the blockchain and baselined. In some instances of on-chain governance implementation, the updated code may be rolled back to its version before a baseline, if the proposed change is unsuccessful.
Pros
It is a decentralized form of governance
Quicker turnaround times for changes
Possibility of a hard fork is reduced significantly
Cons
Low-voter turnout
Tends towards plutocracy (users with greater stakes can manipulate votes)
Off-Chain Governance
What is off-chain governance?
Off-chain governance looks and behaves a lot similarly to politics in the existing world. Various interest groups attempt to control the network through a series of coordination games in which they try to convince everyone else to support their side. There is no code that binds these groups to specific behaviors, but rather, they choose what’s in their best interest given the known preferences of the other stakeholders. There’s a reason blockchain technology and game theory are so interwoven.
How does it work?
Improvement proposals to make changes to the blockchain are submitted by developers and a core group, consisting mostly of developers, is responsible for coordinating and achieving consensus between stakeholders. The stakeholders in this case are miners (who operate nodes), developers (who are responsible for core blockchain algorithms) and users (who use and invest in various coins).
The various stakeholders signal their approval or disapproval for an improvement proposal through private and community discourse. Then, the core developers get a sense for whether or not node operators and miners will agree to upgrade their software. Ideally, all sides agree and the code changes are made smoothly. Everything is announced beforehand and stakeholders have time to update.
In the case of disagreement, stakeholders have two options. First, they can try and convince the other stakeholders to act in favor of their side. If they can’t reach consensus, they have the ability to hard fork the protocol and keep or change features they think are necessary. From there, both chains have to compete for brand, users, developer mindshare, and hash power.
litecoin bitcoin раздача bitcoin sgminer monero cryptocurrency dash mikrotik bitcoin теханализ bitcoin bitcoin pos bitcoin project bitcoin рбк ethereum dao get bitcoin адрес bitcoin transactions bitcoin bitcoin часы bitcoin игры bitcoin matrix отследить bitcoin monero pools bitcoin loan акции ethereum bitcoin вики
bitcoin википедия
bitcoin форки ethereum android продам ethereum верификация tether bitcoin перевод game bitcoin bitcoin block bitcoin development foto bitcoin gadget bitcoin bitcoin spinner bitcoin lurk использование bitcoin bitcoin reserve
ethereum купить ethereum web3 attack bitcoin биржа ethereum bitcoin transaction bazar bitcoin prune bitcoin bitcoin token multisig bitcoin bitcoin surf china bitcoin fox bitcoin bitcoin nedir clame bitcoin bitcoin multibit портал bitcoin multibit bitcoin
bitcoin криптовалюта ютуб bitcoin monero pools moneybox bitcoin bitcoin funding multisig bitcoin bitcoin spend bitcoin mixer bitcoin сервера платформ ethereum carding bitcoin
bitcoin forums
cryptocurrency top tether перевод bitcoin депозит bitcoin people korbit bitcoin bitcoin книги bitcoin mt4 bitcoin pay ethereum монета пожертвование bitcoin bitcoin goldmine bitcoin заработок bitcoin swiss кран bitcoin bitcoin eobot
bitcoin оборудование bitcoin сбербанк claim bitcoin ethereum foundation
Ethereum is open access to digital money and data-friendly services for everyone – no matter your background or location. It's a community-built technology behind the cryptocurrency ether (ETH) and thousands of applications you can use today.bitcoin автоматически cryptocurrency analytics bitcoin создатель
json bitcoin apk tether bitcoin форки bitcoin бизнес
avalon bitcoin настройка bitcoin bitcoin neteller 2x bitcoin
Upon hearing about the new transaction request, each node in the Ethereum network adds the request to their local mempool, a list of all transaction requests they’ve heard about that have not yet been committed to the blockchain in a block.ethereum биткоин If you decide to buy all of the required equipment on your own and not share any of the responsibilities with other people, this is called solo mining.So, when we talk about distribution, what do we mean? Distribution refers to a synchronized ledger that’s shared across various locations by multiple participants (known as nodes) who serve as observers and verifiers of the transactions.stock bitcoin battle bitcoin
bitcoin putin
ethereum заработок сделки bitcoin block ethereum ethereum видеокарты x2 bitcoin bitcoin проект
bitcoin пулы обменник bitcoin bitcoin frog demo bitcoin genesis bitcoin bitcoin qazanmaq stock bitcoin запуск bitcoin nubits cryptocurrency loans bitcoin wikipedia ethereum адрес ethereum bitcoin qazanmaq робот bitcoin joker bitcoin bitcoin pool cryptocurrency calendar bitcoin hash bitcoin legal обмен tether microsoft bitcoin new bitcoin ethereum пулы фильм bitcoin bitcoin de bitcoin accelerator bitcoin 100 neteller bitcoin trade cryptocurrency андроид bitcoin сети ethereum криптовалют ethereum описание bitcoin bitcoin rpc bitcoin серфинг cryptocurrency analytics bitcoin rig
txid bitcoin monero hashrate It’s decentralized, meaning its existence and value is not tied to any agency, government, corporation, or bank. No third party can prevent you from performing transactions with someone, although they can make it more difficult or illegal.вывод monero bitcoin london пожертвование bitcoin курс ethereum разделение ethereum добыча ethereum символ bitcoin usb tether ethereum info настройка monero
ethereum russia bitcoin withdrawal bitcoin зарегистрировать loans bitcoin avatrade bitcoin easy bitcoin bitcoin symbol bitcoin книга bitcoin иконка avatrade bitcoin ethereum алгоритм bitcoin скрипт bitcoin anonymous bitcoin код bitcoin fan bitcoin 123 bitcoin кредиты bitcoin код generator bitcoin
0 bitcoin заработок ethereum anomayzer bitcoin ethereum форк forum cryptocurrency buy ethereum продам ethereum bitcoin bat bitcoin компания автокран bitcoin bitcoin скачать bitcoin подтверждение ethereum сайт кошельки bitcoin linux bitcoin bitcoin hyip waves cryptocurrency bitcoin cgminer bitcoin адреса bitcoin принцип
платформа ethereum bitcoin прогноз bitcoin iso 999 bitcoin bitcoin world кредит bitcoin ethereum info ethereum info Here, there’s no singular centralized authority that maintains a single ledger (like there would be in a centralized system).ios bitcoin bitcoin protocol ethereum miner ethereum coin bitcoin instaforex казино ethereum калькулятор ethereum bitcoin spend
monero benchmark ethereum stratum ethereum chart
exchanges bitcoin blockchain ethereum cryptocurrency gold casascius bitcoin bitcoin nachrichten bitcoin play explorer ethereum ethereum go пулы ethereum bitcoin ann reddit bitcoin site bitcoin лотерея bitcoin ethereum russia monero pro bitcoin shop таблица bitcoin bitcoin utopia bitcoin создатель создать bitcoin
flappy bitcoin bitcoin кэш bitcoin nyse capitalization bitcoin is bitcoin What do you think? Let us know!bitcoin roll Bitcoin mining is very important. It’s worth doing even if you’re not making huge (or any) profits. The more miners working on the network, the more secure it is. Some hobbyist miners mine the network at a loss. They see it as their duty to run a miner to increase the network’s decentralization and reduce the likelihood of a potential attack being successful.coinwarz bitcoin bitcoin create mercado bitcoin
fasterclick bitcoin iphone bitcoin
шахта bitcoin bitcoin биржа
bitcoin school ethereum акции flash bitcoin bitcoin start ethereum видеокарты telegram bitcoin claim bitcoin халява bitcoin oil bitcoin bitcoin betting my ethereum tether комиссии spots cryptocurrency ethereum chaindata 500000 bitcoin bitcoin nodes
bye bitcoin tether комиссии bitcoin вклады сборщик bitcoin 2016 bitcoin bitcoin хешрейт bitcoin play bitcoin 9000 etoro bitcoin партнерка bitcoin forecast bitcoin pixel bitcoin конвертер bitcoin bitcoin сатоши hack bitcoin bitcoin update
bitcoin pay windows bitcoin надежность bitcoin bitcoin hunter 2 bitcoin bitcoin system bitcoin book bitcoin converter
22 bitcoin monero хардфорк
bitcoin greenaddress neo bitcoin ethereum script
de bitcoin
torrent bitcoin bitcoin alien bitcoin государство bitcoin half
bitcoin играть hyip bitcoin When Alice clicks a button to send the money to Bob, the transfer is encoded in a chunk of text that includes the amount and Bob’s address.transaction bitcoin bitcoin nyse bitcoin metatrader plasma ethereum bitcoin bazar ethereum курс ethereum ethereum contracts ethereum blockchain wikipedia ethereum bitcoin spinner How do forks work?bitcoin теханализ ethereum testnet dorks bitcoin bitcoin qazanmaq bitcoin окупаемость bitcoin icon bitcoin qazanmaq monero хардфорк bitcoin free bitcoin миксеры зарабатывать bitcoin wikileaks bitcoin консультации bitcoin bitcoin 2018 panda bitcoin
bitcoin market bitcoin cc avto bitcoin generator bitcoin tether usdt xbt bitcoin хешрейт ethereum
новости bitcoin How does blockchain work?проекта ethereum кран bitcoin flappy bitcoin bitcoin bcn проекты bitcoin
hacker bitcoin bitcoin aliexpress bitcoin indonesia