Why On-Chain Governance Is Critical to Blockchain Growth and Longevity

The decentralized features that make blockchain architecture unique can also be the Achilles heel, demonstrating the importance of bringing network management onto the chain to foster a more inclusive and democratic consensus on network upgrades. Governance Transformation is Key to Unlocking the Innovative Potential of Local Government There is a lot of bitter debate about blockchains, such as how to manage them, consensus mechanisms, implementing changes or upgrading frameworks. These discussions often pitted the networking communities against each other, creating divisions that eventually turned into hard forks. Despite the success of these consensus systems, the future of Bitcoin and Ethereum may be questionable, as evidenced by increased transactions and valuations. The term consensus relates to anything coded for the two largest networks, such as value transfers, how much miners are paid, smart contract transactions, and other basic network encrypted functions. Unfortunately, this means that network consensus is not part of dealing with serious issues or implementing even the smallest upgrades. This parallel governance process takes place only off-chain, often in a highly politicized manner. For evidence to support this point, just look after the Ethereum Classic debacle. Or consider the time it takes for Ethereum to update its consensus mechanism from proof-of-work to proof-of-stake. Implementing network upgrades in this way is difficult, time-consuming, and not based on consensus within the chain. You can think of consensus as a parallel economic system in which participants around the world can operate within the same economic framework without legal oversight or geographic restrictions. But without any link between governance and consensus, major update attempts could theoretically happen without the approval or approval of the community. Fortunately, other networks are on the chain.

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