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TF2 | Governance: Blockchain's Most Overlooked Pillar



Isak heart was with deke red and he's gonna be talking about actually it's probably my favorite pillar or aspect of watching which is governance and it's it's very much often overlooked here you are just gonna grab the clicker here I'm not a professional speaker but I've been working in the blockchain space for a while I'll do my best to share what I've learned about blockchain and governance with you so again I'm Isaac Hart I'm a volunteer community manager at the deke red project deke red is is not a company it's an open-source ecosystem you might relate to it with something like Linux or UNIX or Oracle we're building a system it was shared earlier that we're in the stage of building the plumbing and we agree with that right now we're trying to build an extremely solid foundation in blockchain technology and so I'm gonna try to mix that the technology piece with governance and hopefully somehow come up with something interesting I want to make sure we're on the same page here as far as governance so I'm defining governances methods processes and relations by which a project is controlled and directed we can think about that in the corporate world as that system of representations for stakeholders so you have the vote you have the board typically they have policy governance and then you have your executives who try to execute that strategy in the decentralized blockchain world that model is now antiquated by default we can't use that model and expect to keep up with the way the world is changing so we're looking at different principles as far as blockchain governance one of the first principles is decentralized participation participation needs to be measurable and it needs to be in a defined range that is controlled by that project so that range can't be limited by the technology one of the major examples where you see that limited by the technology would be with our first major blockchain Bitcoin so some of the same groups that are working on this project today originally worked on Bitcoin and they ran into a problem there was a small group of centralized developers that had built Bitcoin and owned the keys and had control making changes so there was a two-stage process on the Bitcoin developers could say here's the push we want to release and then the miners could say yes or no they could veto that and so that's essentially the governance that you haven't Bitcoin that's still the governance that you have today back in 2012 a group came along and they wrote and implemented a better version of Bitcoin it was written in golang which the more modern programming language it was better documented it solved some of the issues that have come up recently as made major vulnerabilities within Bitcoin and the core developers who were not goaling developers were extremely resistant to that and there was no way for other people in the community myself and many others who were in the Bitcoin community at that time to voice hey we want choice here we want multiple implementations to be supported we want this to be released and we want it to get attention it did eventually get released it is in use today but without decentralized participation there was no way for that to take center stage so we also need decentralized verifiability so what do I mean by that well today in most blockchain projects voice is on Twitter you see a bunch of people some of them verified people within the community some of them paid accounts out there making a lot of noise when you see a big decision come up like should we raise the blockchain sigh actually I would say this is a very small decision it's very unimportant whether we change the blockchain size but this caused a huge division in the Bitcoin community and created what some people call Bitcoin cash now today so out there in the Twitter world it looked like the community is pretty split this is like a 50/50 thing there's people on one side there's people on the other side well I guess we're gonna fork the community we're gonna split this in half after that happened what happened is you see actually ninety percent of the community did not support this increase the P o w- most of them did not support this increase the community mostly didn't move over and for that reason you see bitcoin valued at a much higher number than you see Bitcoin cash valued but because there's no decentralized verifiability within that blockchain project there was no way to know that ahead of time and so what you've done is fractured the community you also need to centralize security so what do I mean by that when you have a vote it is extremely important that that vote is tallied accurately transparently and securely and so that means that your voting system needs to be integrated at the same level as the transaction system within your blockchain it should have that same level of security it should not be it should not be gamma file it should not be a system where you can purchase votes it needs to be a system where the stakeholders within your system are verified and the votes are transparent alright this is maybe gonna get a little technical I'm gonna skip over most of this for this crowd I didn't know exactly who I was gonna see and when I came in here today this is essentially telling you what I just told you about how pows based governance works today on most of the major projects Bitcoin aetherium litecoin every token based project that's running in ERC 20 it essentially is a centralized development group that says I want to do this and then a pows mining group that says ok or no and you actually don't know whether that answer is going to be okay or no until you propose it and so that means there really is no way to make those decisions in a truly decentralized manner so I'm gonna go a little bit more into the history here for those of you who are maybe not have not followed the blockchain project for since at least 2010 you might not be aware that there were a lot of great minds that started entering into the blockchain space around that time and came into the same level of resistance within Bitcoin we're outside thinking outside minds were not accepted not only is the development thinking within that project fairly rigid the political thinking is fairly rigid as well and it became very difficult to enter into that space without any sort of way to measure voice so around February 2013 a developer who's I'll just leave with his name as Taco Time that's how he's known in the Internet community he's also by the way the person that came up with the idea of Manero and created the Monaro fork so if you've heard of Manero that's the same person who sponsored that project he said you know what we need to somehow fix this governance issue we need to build this from the ground up and design a system that can be governed in a truly decentralize decentralized fashion it's gonna allow us to move beyond this antiquated system and he worked with that same group of developers who had built the superior implementation of Bitcoin that was rejected and started developing this new system originally it was called mem coin peercoin mem coin – and eventually was launched as Deek read and Deek read is a open source platform that allows you to utilize these same governance tools within your project either on the decribe blockchain itself or in your own blockchain because it is a decentralized open source platform essentially everything within it is free to use and any of the tools can be copied and replicated from the repositories out on github so what did this new model look like well consensus governance involves a couple of things hard folk fork voting and authoritative updates so what does that mean it means that when the developers get together and they come up with an idea or the community sends an idea and it's coated for change and it's a major change to the project it requires what's called a hard fork now hard forks gotten a lot of bad press because in a lot of cases hard fork splits a project or as mentioned earlier you can fork a project off and create your own token however hard fork also just means making a big change okay we'll just leave it at that making a big change so developers come in they want to make a big change they need a way to push that they need a way so that no one has veto power the community has said they wanted the developers have created no one should have veto power so that's called a Thorat eight of updates so that's built into the system the second layer of governance is your treasury governance now one thing that happened you probably have heard of block stream so block stream was the second large company to come into the Bitcoin space and take a look at development now they had a different strategy instead of coming in with their own team they gave the Bitcoin developers houses and food and health insurance so that they could keep doing what they're doing theory so they could keep doing what they're doing what that actually also does is by is quite a bit of influence within the Bitcoin space when everyone who has the keys is now living under your house and eating your food so treasury governance is also an important thing we need to have transparent funding and we need to have delegated spending so what do I mean I mean the funding has to be coming in in a visible way that has nothing to do with what the developers are doing or what the community is choosing to do delegated spending means that spending of those funds is also controlled through that same decentralized system of governance that's shared by all the stakeholders so there's a couple different models to do this our decision mathematically was to split this out with these numbers it could be split out with any numbers you want if someone wants to get into the mathematics behind why we chose these numbers I'm happy to go into detail with that with you the short version is 60% P o W mining means that there's supply available for everyone who wants to get involved in the project ongoing it's not becoming more centralized which is the problem with a pure POS solution 30% POS significant incentive incentive for the stakeholders to continue to lock their funds into the voting system which means you you are recruiting a community that's in it for the long haul a large majority of our community when they have been in talks and I'll state this for myself I have a ten year vision with my investment in 2d cred most people say something similar to that we're talking about the long run we're not worried about whether it's super flashy right now there is no product there is no DAP the markets not at that place we're not selling anything we're building technology ten percent is going into the Treasury that means ok you probably know how Bitcoin works like every block reward 100 percent goes to the miners right and then they sell it on the exchange and then every all of us can buy it so this year 60% is doing that 30% is going to the faster ok no problem 30% is going to the people who are voting and 10% is going into that Treasury so it's a hundred percent self-funded there's no outside influence no VCS this is a model that can easily be replicated like I said this is all open source I'm you can either use it or borrow it alright I guess I'll skip through this this just shows how it works these are some other advantages of those numbers that I talked about you've probably heard about 51 percent attacks essentially every project that's not on Asics and isn't aetherium is extremely vulnerable to 51% attacks right now if you don't have a large ASIC network and you're not aetherium there's a bunch of people out there who are for fun right now double spending your money and that's going to continue to happen you also get 40% greater efficiency you know Green is a buzzword these days so that's great it also prevents centralization like I mentioned all right so that's our killer feature is good governance and with good governance you can have any feature you want I'm quoting there one of our VCS and I guess we will go to questions okay yeah absolutely yeah so that's one of the reasons why we chose this set up mathematically is working the numbers out this allowed us to from the beginning create a system that's decentralized so for example the top thousand addresses own 18 percent to pass a vote you need 60 percent for a funding seventy-five percent for a hard fork decision so you need a pretty large chunk in the community you're gonna need the VCS you're gonna need the early developers you're gonna need the second round developers and you're gonna need a chunk of the community not all of them but you need some from all of those groups to pass something okay that it yeah one more question great could you just explain this being self-funded and some community funding what do you get out of it at the end of your 10 years effort sure well I hope that the project is successful and so there's a financial incentive for me certainly for that to be because I invested some my own money in the project the other thing is many of us came from backgrounds like developing on linux projects OpenBSD like i mentioned some of us bitcoin projects so doing the work is actually very fun when you really believe you're building something that's like for the betterment of mankind to build a system that can be used in the long run it means you get a lot more enjoyment out of your work so that's that's a piece of it as well yeah thanks all right thank you you

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