Hey all!
While I was listening to my favorite podcast today, Untold Stories by Charlie Shrem, I was particularly taken with a point that Charles Hoskinson made about Cardano. Everything he and the Cardano distributed team are doing is leading towards Cardano truly becoming a "self-sustaining system." To get a window into what this means, it's important to know the difference between "on-chain" and "off-chain" governance.
Overall, it's easiest to understand off-chain governance through Bitcoin's Bitcoin Improvement Proposal system, which formalizes how the network can be improved by its members. In the BIP system, no one votes with their coins. All discussions related to any sort of improvement are done "off-chain."
Since most BIPs have been technical in nature, we can look at the process of "off-chain" governance through that lens.
All technical BIPs have to be proposed by developers or someone working with developers, then deliberated on by developers, then passed on to miners, who signal whether or not they approve of the BIP that the development community has put forth. In other words, with all of this in mind, only those who secure and build the infrastructure of the network have a direct say in its future. Yes, BIP discussions are typically transparent and yes users can signal their disapproval for certain BIPs and even leave the network as a result of one being passed. Still, with Bitcoin, there is no formalized process for the average user to get involved in improving it. The same goes for any other network that depends on off-chain governance, like Ethereum. (To be clear, I am a big supporter of both but this is how it is, in my eyes).
Because of these facts, networks like Tezos, Cardano, and Dash have continued to grow since their launch, since they depend instead on "on-chain governance." To simplify things, just think of a blockchain network that is governed on-chain as one that allows all verified staking users to vote on all improvements. Yes, exceptions to this rule exist, but it's the dominant example of on-chain governance for now.
From this group, Tezos differentiates itself by requiring that users called bakers(that stake 10,000 or more XTZ) vote for the rest of the community. In a sense, this establishes it as what is popularly termed a "Delegated Proof-of-Stake Network," though I see a possible future for it that stretches beyond this structure, which I'll discuss in a later post. Bakers, in a nutshell, are like representatives for the greater Tezos community, who can lost their seats of power if they act against the will of the community. Therefore, they depend on the average user to keep their status intact.
To me, Tezos' key differentiator is that it is a self-amending ledger, which in other words means that if a technical improvement is passed by the baking community then developers have to launch it.
Dash, on the other hand, is similar in that only masternodes can vote, which are users who(in a basic sense) stake 1000 Dash. Like Tezos bakers, Dash Masternodes, can lose their status if they are determined to have consistently been acting against the community's best interests. Dash, to my knowledge, does not yet have any sort of "self-amendment" feature and still depends on developers to do as they should when improvements are passed.
Finally, there's Cardano.
Once the Voltaire development phase goes through(possibly by the close of 2020), it will be truly interesting to see what being a "self-sustaining" network will be like in practice. Will Cardano look like Tezos, for example, with one or two small differences? Will it present a type of on-chain governance that truly disrupts the status quo?
For now, as I continue to research their development goals, these questions remain unclear.
If I can leave you with one final thought, it's that Cardano has an advantage in its decentralized community of scientists that consistently produce peer-reviewed material related to the project. If it's new governance system can combine their insights with the votes from the average user, then the sky is the limit.
What do I mean by this?
Consider if both Cardano researchers and all of its other user groups had an equal say in the network's future, but the researchers had some sort of check-and-balance-related oversight over all improvements. For example, the community could pass an improvement, then researchers could have a certain number of days to decide if it is viable and back their decision up with research that's posted to the community in a short, easily understandable form. Of course, it might be important to give Cardano' other participants the ability to appeal the judgement of researchers if it was proven to be faulty in some major fashion.
That, in my view, is where a function like a dual griefing/staking mechanism comes in.
If you're not familiar with griefing, don't fret. It's basically the opposite of staking. Staking coins on a network earns you interest in the same coin. Griefing takes your stake away if you act against the rules of the network that you're a part of. If you find yourself questioning how griefing and burning tokens/coins are different, then you're not alone. In my experience, they apply to different contexts.
Burning tokens, we can think of as destroying part of the supply of a token to create further scarcity and thus, possibly increase its value.
Griefing, on the other hand, is only used in context with punishing stakers for malicious acts against a network. Even so, like burning, it can increase a token's value because of the sentiment it creates that the network involved is more trustworthy than others.
It goes without saying that I'm not sure at all whether Cardano plans to implement any of these features. Still, I think that together, they could all create a uniquely governed blockchain network, such as none of us have seen yet.
Blockchain governance is one of my favorite topics. Consider this post as my informal attempt to set the scene for many more in the future in which I explore governance related topics. With that in mind, now that you understand griefing in a very basic form, stay tuned for my next post, in which I'll introduce you to Erasure Bay and how it uses griefing to incentivize truth and trust.
Connect with me on Twitter @ExpatCrypto3, any time. Tips keep me going!
- Expat
-- To all Readers- I'm sticking with an informal format for these posts, a sort of stream of consciousness-like approach. On my site, blockdemiclab.com, you will find my more formal work, over time.
