The importance of experimenting on-chain governance
One of the thorniest topics in cryptocurrency community is governance. The decentralized nature of public blockchain protocols makes decision-making inherently challenging to coordinate. The design of Bitcoin follows an off-chain approach. The original vision in Bitcoin whitepaper, used the rule of thumb "one CPU one vote", is now heavily skewed due to the aggressive expansion of ASIC miners.
So how does Bitcoin governance work, exactly? Developers write what are called Bitcoin Improvement Proposals in a Github repo, and coordinate discussions through a mailing list. Despite its tendency to create tension between factions, the off-chain governance model favored by many researchers for its lack of formal restrictions.
Are structureless communities truly decentralized in terms of power allocation? Is it better to experiment various formal structures, or let informal structures develop organically? In an in-depth essay below, pseudonymous cryptocurrency researcher Richard Red discusses the merits and shortcomings of on-chain governance, and why it is an important experiment.
"Proponents of on-chain governance would tend to see chain splits as sub-optimal, they divide communities and resources and weaken network effects. Where a method of on-chain governance is embedded in the foundation of a project, there is a built-in way of defining what the rules of the protocol are and how they can be changed."
It looks like Politeia (Pi) is done enough for testnet. We are aware of some issues but from the looks of it all data is on disk and anchored in the blockchain. We are also aware that it isn't super user-friendly yet so we'd love some critique. @decredproject pic.twitter.com/WcKfKElPBn— Marco Peereboom (@marco_peereboom) June 20, 2018
"The impetus for the freeze came from the EOS911 initiative that has been adopted to help protect users with compromised private keys against phishing scams. However, the way freeze was implemented caused severe criticism as the BPs discussed the decision over a two-hour-long Telegram conference call and then simply disabled the nodes and backed up the data."
Some problems with with EOS block producers freezing balances:— nic carter (@nic__carter) June 19, 2018
1. you're a BP. You get control over the chain with 3 other BPs. You can now accuse tokenholders of wrongdoing and threaten to freeze them unless they pay up. It's a nice racket.
Lots of exchanges had very bad internal processes and design on how to deal with #Bitcoin and other UTXO based coins. We've seen this in the past with Coinbase, Xapo and other big exchanges. This isn't an issue until the fees go up (or you try to consolidate everything asap).— WhalePanda (@WhalePanda) June 20, 2018
"With Java enabled, Exonum users can now launch smart contracts, Palienko added. The Exonum head expects that this initial step will clear the way for Bitfury’s blockchain to bind with the Java Virtual Machine’s auxiliary programming languages, as well."
"A simple automation mistake(feature) caused everything to collapse. I was escorted out of the building like a thief, I had to explain to people why I am not at work, my coworkers became distant (except my manager who was exceptionally supportive)."
News & commentary
I want to talk about why Ethereum matters to me, and why it should matter to you, too.— Lane Rettig (@lrettig) June 20, 2018
In 2018 when most people in the world hear "Ethereum" they think of ICOs and scams and shills. That's disappointing but understandable. The true message has gotten buried.
"When it comes to ICOs, Concannon thinks the legal entanglements could get much more complicated for all parties—the token may become a kind of legal hot potato that’s difficult for an investor to hold, let alone trade. Setting up in Malta or some other non-US jurisdiction may not be enough to put an enterprise fully outside of the SEC’s rules."
"For most of its 10-year history, the digital currency bitcoin has been viewed by some people as the future of money. Lately, to get some insight into what the future might hold, some are focusing on how bitcoin compares with currencies of the past."