Decentralized Governance: Power to the People
Decentralized governance are procedures by which the blockchain and dApps network platform is managed unmediated and fairly.
What is Decentralized Governance?
Decentralized governance involves different methods of voting on the technology, strategy, modernization, and regulation of the platform. The two main approaches to blockchain governance are on-chain governance and off-chain governance.
In turn, off-chain governance involves a decision-making process that takes place outside the blockchain, such as in online forums or in-person meetings. Off-blockchain governance methods can include public discussions, proposals and collectively agreed-upon updates.
Broadly speaking, decentralization is a multifaceted term meaning the transfer of authority and responsibility for public activities from the central government to subsidiary or quasi-independent government entities and/or the private sector. It is a type of organizational structure in which top management delegates responsibility to middle and lower levels of management.
Decentralized networks and platforms depend on increasingly inventive management systems to ensure the longevity and overall real-world use of their initiatives in the absence of a centralized authority. Typically, blockchain governance uses methods to make decisions about project development and ongoing upgrades, as well as to ensure that the underlying protocols and ecosystem run smoothly and efficiently.
From a global perspective, the widespread adoption of blockchain applications makes it possible to abandon existing centralized institutions and build a new social contract based on consensus rather than coercion, leading to a more transparent, independent and resource-intensive global society. The new social contract will contain decentralized platforms for communication and cooperation, as well as decentralized arbitration systems for resolving issues through smart contracts with rules agreed upon by the participants and consistent with common or natural law.
Roles vary depending on the structure of the network and the relationships within the decentralized network management. This necessitates the allocation of managerial responsibilities, rights and obligations, taking into account the power dynamics between the players. Moreover, when new elements of power interactions become relevant in blockchain-based solutions, such as the interaction between server providers and miners, management systems must be held accountable for them.
The disadvantage of decentralized governance, however, is that public blockchain is inherently unstable, and at any moment it can be forked or abolished by the community if it ceases to be attractive or profitable. As a consequence, it can be debated whether a fully decentralized blockchain such as Bitcoin can be considered a universal accounting system, since there is no guarantee that it will continue to work or even exist in the future. Contracts and government services can become invalid due to obsolescence, disinterest, or migration to another system.