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Industry Leaders Reach Agreement on Blockchain Governance

Last Updated March 4, 2021 4:50 PM
Andrew Quentson
Last Updated March 4, 2021 4:50 PM

Prominent leaders in the blockchain space have formed a new group with the aim of promoting blockchain’s use cases, increasing collaboration within the industry and addressing blockchain governance. According to a newly published ten points agreement  participants state that despite the blockchain being a decentralized technology:

“Like-minded people and groups can self-organize to voice their valuable perspectives, collaborate and solve problems in a bottom-up, multi-stakeholder fashion. Especially as the Internet Provides new means and mechanisms to do so.”

The agreement is the result of a meeting between 16 prominent blockchain experts and industry leaders at the family compound of Don Tapscott, best-selling author of numerous books, including Wikinomics, and his son Alex Tapscott, who together have recently published Blockchain Revolution. Speaking to CCN.com, the Tapscotts state:

“Technology is not a panacea. Without strong leadership from everyone in this industry – working collaboratively – blockchain may never reach its potential. The technology genie is at our disposal, once again, to reshape the world of business and the old order of human affairs for the better- if we will it. Time is of the essence and we hope our efforts will get people thinking critically about why governance and stewardship matters.”

The ten “consensus conclusions” include the development of a roadmap and action plan to assist new government administrations, the use of the Linux Foundation which “is committed to take additional steps to encourage the development of advanced programming talent in the blockchain space” and, among others, the launch of a blockchain hub after conducting “a research project to inventory, categorize and analyze the current blockchain ecosystem – organizations, networks and individuals, [as well as] identify key gaps and outline strategies for moving forward.”

The governance network is based on a new system called the Global Solutions Network Program and detailed in a freely available paper by Alex Tapscott where he states:

“Four Global Solution Network (GSN) types will play a critical role in a [blockchain] governance network. Global standards networks are needed to set technical standards for interoperability and other key performance issues for the industry. Policy networks are required to provide international guidance on issues such as crime, fraud, consumer protection, money-laundering, and other substantive policy issues. Watchdog networks will scrutinize the actions of powerful stakeholders in the ecosystem and ensure that all players behave ethically and observe key standards set by the community. Finally, knowledge networks will help to educate and inform a growing network of diverse stakeholders, including government policymakers, merchants and users.”

Overall this sets an all-rounded approach for the entire blockchain space with the individuals in attendance broadly representative of the current wider blockchain ecosystem. From the private blockchain space, Brian Behlendorf, founder of the Hyperledger project which is supported by tech giants such as IBM as well as financial institutions such as JP Morgan, was in attendance. From the public blockchain space the meeting had Joseph Lubin, founder of Consensys, the Ethereum based development powerhouse that has already incubated numerous new start-ups, such as MetaMask and Uport; Jamie Smith, former deputy White House press secretary who is now chief global communications officer of BitFury, Matthew Roszak, co-founder of Bloq, a blockchain based development start-up that is private or public blockchain agnostic, as well as others.

Moreover, there was Jim Zemlin, executive director at the Linux Foundation, Perianne Boring, founder of the policy focused industry group The Chamber of Digital Commerce, Tomicah Tilleman from the New America Foundation as well as numerous other founders, CEOs and consultants from the world of blockchain start-ups and finance.

In responding to a number of our questions the Tapscotts state that the group is self-funded at this stage with no current oversight or involvement by regulators but plans to be “proactive in engaging with government to help them understand why this technology matters, how they can use it to transform government, and assist in the development of thoughtful policy.” The Tapscotts further state that the group itself is:

“A collection of like-minded individuals who believe in the potential of blockchain to bring about a more prosperous world, but who also believe we need multi-stakeholder stewardship to make that happen. We plan to support industry bodies, like the Chamber of Digital Commerce and NGOs, such as New America and the National Democratic Institute, and would support any group who is serious about tackling the many challenges we face as an industry.”

Can This Actually Work?

It is not yet fully clear what exactly will be implemented in practice and how it will be executed, with the group having just formed, but pro-active engagement with the blockchain community, including constant updates for the wider public, would be necessary if the group is to feel legitimate and representative.

Overall, however, I believe this is a welcomed development and publicly raised the suggestion for an industry level organization that sets guidelines, provides quality checks, pressures regulators in certain areas – such as allowing regulated exchanges to offer margin trading – and overall addresses aspects that fall under the commons problem.

The suggestion came naturally while reporting on Bitfinex’s Market freeze that sent the price crashing – twice – more than a month before they were hacked. An industry group could have asked for an explanation, could have provided or assisted in publishing a report on what happened, or could have publicly warned everyone, potentially avoiding losses.

All of this would be voluntary, but if the group is accountable, transparent, acts in the best interest of all stakeholders, increases professionalism for companies that participate even if they are not fully regulated, have reasonable guidelines, etc, then one would expect any reputable company to participate.

Of course, the danger is that an old boys network may form which may work to protect incumbents while setting up barriers for newcomers, but, since participation is voluntary, the risk may be minimized and, in many aspects, it would be preferable to enforced regulation from government bodies, especially at this very early, but crucial stage, for blockchain’s development.

As we have seen from the DAO, from the Bitfinex hack and other aspects, an increase in professionalism is much needed for this space, especially if the blockchain’s potential, whether public or private, is to be developed further. Whether the newly formed group can provide it remains to be seen.

Featured image from Shutterstock.