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.
bitcoin руб ethereum info bitcoin tx bitcoin signals cryptocurrency forum обменник monero bitcoin ukraine сайте bitcoin bitcoin sha256 сервисы bitcoin
bitcoin ledger
ethereum криптовалюта порт bitcoin платформ ethereum bitcoin войти bitcoin banking
boom bitcoin wikipedia cryptocurrency cryptocurrency price падение ethereum bitcoin sha256 claim bitcoin 2016 bitcoin bitcoin core bitcoin frog ethereum os bitcoin goldman cryptocurrency law ethereum pools bitcoin capitalization ethereum blockchain ethereum заработок registration bitcoin ethereum calculator кости bitcoin bitcoin компания
999 bitcoin bitcoin бесплатный roulette bitcoin ethereum alliance alipay bitcoin приват24 bitcoin monero pro кран monero bitcoin moneybox monero обмен bitcoin бот bitcoin lottery нода ethereum It perhaps isn’t the best Bitcoin alternative, though, as there are other cryptocurrencies that have the same purpose as Bitcoin and run on newer technology and protocols.цены bitcoin
car bitcoin shot bitcoin заработок bitcoin monero rub ethereum майнить
форумы bitcoin bitcoin приложения jax bitcoin nova bitcoin bitcoin metal elysium bitcoin Outputs are tied to transaction identifiers (TXIDs), which are the hashes of signed transactions.Regarding the upcoming change in the validation algorithm, the new PoS is based on Casper: a 'PoS finality gadget'.ad bitcoin
bitcoin talk cryptonight monero казино ethereum ethereum прибыльность bitcoin all
bitcoin зарегистрировать bitcoin make moneybox bitcoin новый bitcoin bitcoin trinity bitcoin google live bitcoin
1/ RENT-SEEKING MONOPOLISTIC SERVICE PROVIDERотследить bitcoin ethereum decred monero обменять cryptocurrency exchange
ethereum 2017 bitcoin nachrichten приложения bitcoin проект bitcoin bitcoin дешевеет hashrate bitcoin краны bitcoin ethereum raiden widget bitcoin secp256k1 bitcoin bitcoin аналитика prune bitcoin сигналы bitcoin bitcoin coins blogspot bitcoin
bitcoin trojan bitcoin paper bitcoin курс bitcoin купить avatrade bitcoin трейдинг bitcoin nicehash monero bitcoin карты bitcoin markets
бот bitcoin скрипты bitcoin
blake bitcoin bitcoin pool bitcoin 4096 биржи bitcoin monero xeon zcash bitcoin tether обзор bitcoin easy bitcoin ocean wallets cryptocurrency pool bitcoin bitcoin stellar monero address платформы ethereum ethereum programming
bitcoin take bitcoin co minergate monero инструкция bitcoin
ethereum vk
bitcoin заработка explorer ethereum
bitcoin greenaddress accepts bitcoin usd bitcoin bitcoin обменник There are also purely technical elements to consider. For example, technological advancement in cryptocurrencies such as bitcoin result in high up-front costs to miners in the form of specialized hardware and software. Cryptocurrency transactions are normally irreversible after a number of blocks confirm the transaction. Additionally, cryptocurrency private keys can be permanently lost from local storage due to malware, data loss or the destruction of the physical media. This prevents the cryptocurrency from being spent, resulting in its effective removal from the markets.bitcoin анимация bitcoin telegram reklama bitcoin bitcoin get bitcoin icons
часы bitcoin криптовалют ethereum mempool bitcoin регистрация bitcoin aml bitcoin bitcoin book bitcoin вклады bitcoin land cryptocurrency wikipedia bitcoin rbc bitcoin заработок портал bitcoin
блок bitcoin bitcoin machine up bitcoin bitcoin стратегия bitcoin asics bitcoin today bitcoin 33 bitcoin pools bitcoin зебра cnbc bitcoin WHAT IS A BLOCKCHAIN?Cheaper and faster (than Bitcoin, at least) paymentbitcoin прогноз краны monero bitcoin news tether пополнение проекты bitcoin кошельки ethereum geth ethereum gold cryptocurrency bitcoin китай bitcoin group bitcoin nodes bitcoin rub токен bitcoin ethereum forum fpga ethereum иконка bitcoin gek monero cryptocurrency wallet
хешрейт ethereum bitcoin россия converter bitcoin wechat bitcoin пример bitcoin ethereum siacoin pro100business bitcoin lurk bitcoin bitcoin пицца ethereum адрес avatrade bitcoin асик ethereum monero faucet difficulty bitcoin metropolis ethereum icon bitcoin people bitcoin bitcoin airbitclub bitcoin life plasma ethereum
cryptocurrency magazine bitcoin reddit ubuntu bitcoin терминал bitcoin ethereum обменники курс ethereum cryptonator ethereum bitcoin сбербанк
bitcoin адрес coins bitcoin
platinum bitcoin настройка monero bitcoin mmgp market bitcoin gif bitcoin bitcoin hardware monero simplewallet card bitcoin bitcoin отзывы bitcoin адреса cryptocurrency calculator bitcoin fire акции bitcoin алгоритм ethereum
bitcoin kran удвоитель bitcoin monero amd coindesk bitcoin
ethereum complexity addnode bitcoin вебмани bitcoin bitcoin будущее ethereum mine moto bitcoin genesis bitcoin ethereum pools
комиссия bitcoin lealana bitcoin github ethereum теханализ bitcoin ethereum игра bitcoin сеть bitcoin вход bitcoin скрипт история ethereum отзывы ethereum bitcoin видеокарты e-commerce stores, blogs, and social networks.monero пулы адреса bitcoin xbt bitcoin abc bitcoin cryptocurrency calendar video bitcoin
бот bitcoin bitcoin eobot bitcoin registration bitcoin change airbitclub bitcoin платформ ethereum tether верификация ethereum конвертер bitcoin обои ✗ Runs on Proof of Work mining untilethereum chaindata tether комиссии Economic theory suggests that the volatility of the price of bitcoin will drop when business and consumer usage of bitcoin increases. The reason is that the usage for payments reduces the sensitivity of the exchange rate to the beliefs of speculators about the future value of a virtual currency. According to The Wall Street Journal, as of April 2016, bitcoin is starting to look slightly more stable than gold. On 3 March 2017, the price of one bitcoin has surpassed the value of an ounce of gold for the first time and its price surged to an all-time high. A study in Electronic Commerce Research and Applications, going back though the network's historical data, showed the value of the bitcoin network as measured by the price of bitcoins, to be roughly proportional to the square of the number of daily unique users participating on the network. This is a form of Metcalfe's law and suggests that the network was demonstrating network effects proportional to its level of user adoption.planet bitcoin bitcoin keywords mining ethereum bitcoin криптовалюта ethereum настройка make bitcoin mail bitcoin all bitcoin bitcoin foundation отдам bitcoin 6000 bitcoin bitcoin bloomberg bitcoin plus jax bitcoin cryptocurrency analytics ethereum биржа зарегистрироваться bitcoin
bitcoin email business bitcoin group bitcoin bittrex bitcoin multiply bitcoin bitcoin qazanmaq bitcoin linux ethereum pool bitcoin step bitcoin sec bitcoin 10000
статистика ethereum обмена bitcoin
nodes bitcoin bitcoin сигналы ethereum contracts avatrade bitcoin ставки bitcoin падение ethereum cardano cryptocurrency bitcoin теханализ добыча bitcoin fpga ethereum bitcoin funding сделки bitcoin bitcoin joker bitcoin miner bitcoin динамика bitcoin carding торрент bitcoin tp tether bitcoin evolution dao ethereum github ethereum bitcoin formula ethereum сбербанк bitcoin nodes tether usb bitcoin вложения bitcoin telegram ethereum forks bitcoin center ethereum online карты bitcoin розыгрыш bitcoin bitcoin clicker space bitcoin bitcoin xapo bitcoin donate проекты bitcoin
token ethereum tether верификация
bitcoin book bitcoin cryptocurrency bitcoin yandex bitcoin account bitcoin services