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Blockchains, politics, and governance layers?

Contributed by @nixops

A real world view of the drama surrounding governance coins.

When you hear of blockchain most in the general public just assume you mean the cryptocurrency space and or Bitcoin. Most people associate blockchain with Bitcoin. That is to be expected as Bitcoin is the “killer app” so to speak for the cryptosphere. It is important to note that there is more to the world of blockchain and in the world of cryptocurrency, however, let us not confuse the two though. It is important to realize without the blockchain there would be no bitcoin, it is a bi-product of the existence of it’s chain.


Blockchains are supported by the community and it’s miners that continue to run copies of the ledger as well as confirm transactions, this is a great economical model to support it’s infrastructure. One may ask, well how does this work? I will give a quick crash course on this process:

1. Chain is stored in ledger.
2. To add transaction it must be confirmed or mined.
3. Transaction is added, fee is then distributed to miners.
4. Transaction is then added to chain. Chain continues.

This is a sustainable model of how a typical chain operates. Now this is a high level crash course there, and some other specifics take place. With that model the miners, node operators, and users of the chain guarantee it’s continued usage. Now, this is where things can take a very dangerous turn for the worse, and this is my attempt to shed some light into the growing dangers of a “new model” that is ever increasingly making itself relevant in the cryptosphere.


All chains have politics, it is important to keep that in mind when reviewing a coin and or looking into the technical aspects of a chain and its development team. Some will say well Satoshi did not deal with politics, and you would be wrong, politics always play a part in software. Now, some may say “well politics and chains?” Wait, did I miss something? I must remind you that any team project or any project with outside collaboraters will always have politics. Some involved in a project may have financial bias, and others may not care but to remain a purist in the ideas and their work. Both have merit, but where this presents a problem is when an outsider looks into this.

Two famous examples of politics in blockchain would be the BTC/BCH fork and the ETH/ETC fork. Both were influenced by the aforementioned persuasions. In a typical lifecycle of a chain you will see forks and improvements. Along with that you will see dead chains, as the community supporting that chain or that fork may eventually
decide to change or they decide to no longer be a part of it. This is ok and it is the natural progression in software lifecycle. Politics are a breeding ground for interesting and more times than not, it becomes very harmful to the community. It will create rifts and anyone that would like to deny that this occurs, I would like to point
something out. Bitcoin is constantly on the verge of a civil war, as it should be. Cryptography is adversarial and financial systems are adversarial. If there is no turmoil or differing of opinions in the code and or way things are proceeding, then bigger, hidden, and even more disastrous things could be occurring. Consistent arguing over the core technology of a chain happens and should.

As it sits right now, real chains do not use a layer to protect assets from other users. It relies on you being responsible for your actions and your own operational security. This is where the “be your own bank” originates from. In today’s over flooded market of ideas and random offshoots we are seeing a disturbing increase in what is being commonly called as a governance layer.

Governance Layers.

Keep in mind I follow the purist mantra of being your own bank and being personally responsible for your own funds and your own destiny. But what happens when you get a team together, a huge marketing campaign, and hit the chords that sounded right to a large investor? You get nothing short of an ICO that launches after fund raising four billion dollars to literally not be able to operate on it’s initial launch.


Now, I was in on some telegram chats and what I learned was that Block Producer’s ie, the way EOS makes blocks or continues with the processing of transactions on it’s network, could actually stop producing blocks if they decide to. This is terrible, as you are giving someone else control over the ability to send a transaction over that network. No one individual can decide if your BTC transaction is permitted or not, it will go through if the math works. That is how it should work with a chain, but there is this growing number of individuals and ICO/coins that now want to make that decision for you. By making decisions for you, I mean now after no activity in 3 years, they could redistribute your funds as well as stop the chain when they see fit due to infighting.

With a look at that last piece there, you may say, wait stop a chain? And the answer is yes, they have and will do it again. This poses serious concerns as with infighting being the reason no one can transact on your chain, that is not a good look. It is important to note, that if you can’t transact on a non governance chain it is due to a technical problem in which technical people will resolve. If you can’t transact on a network because two people do not get along, then the real question I have for that team is as follows:

What did you do with 4 billion dollars? You have people that you pay 10k USD a day to produce blocks and they can not even do that consistently?

There are inherent dangers with trust, there are more dangers when you trust others to decide for you, and yet there is the extreme most danger when they can decide if you can even have a functional chain. If your software does not work because of the control of a few select, delegated members, then you would have to conclude it is just like the banking system. Which was the whole model we were moving away from with the onset of blockchain revolution and BTC.

I want to add feel free to research the above mentioned incidents and others. Make some popcorn though, you will need a snack.

Cute little marketing image for EOS, inaccurate as the power is the delegate’s, we know how well delegate systems work right?

Closing thoughts.

I am and will always be a purist, but some may question whether we need governance. I think this is an individual choice, however, do you need to blindly trust a third party? No, you can build your own governance model with smart contracts to handle such a thing if you desperately wanted it. There are tools, fight with them, do not just blindly give control to other people. We saw how that worked out with the banking system, so if you like governance you already have it. If we are building a new world, then let’s build it. But let’s learn from the mistakes of the old world. What amazes me the most is the consistent view of this as being revolutionary, the only thing revolutionary is the blockchain itself. Governance systems do not work outside of blockchain, who would have thought it would work inside of a blockchain? I leave you with a quote from my better half to give some more insight into a non technical person’s view of chain politics.

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