Why Blockchain Governance Matters

If you’ve read my previous post, you probably understand what blockchain governance is. If you haven’t, that’s fine, I’ll break it down for you: governance is just a fancy word for decision-making. In the world of blockchain, it’s how rules are set, how updates happen, and how conflicts are resolved within a blockchain network.

But why is this important?

We’ve become used to our data being in the hands of banks, internet companies, and governments. Even though we know the risks of having all our data in one place are significant, what’s even worse is having one person, or a handful of people at best, decide what to do with our data and how to use it. The solution to that is decentralized blockchain systems: systems where everything is transparent, and everyone shares ownership and access. But wait, if everyone shares ownership and access, who makes the decisions? BINGO. That’s where blockchain governance comes in.

So why does it affect you?

Blockchain governance matters because the decisions made on the network shape your experience as a user. For example, decisions on transaction fees can determine how much you pay to transfer funds. A famous example is the Ethereum DAO hack in 2016, where governance helped decide to implement a hard fork to recover lost funds. When governance works well, everyone feels they are part of a fair and efficient system.

As blockchain networks grow, governance is what keeps them evolving. In future posts, I’ll explore how these systems grow and how you can play a part in it.

Until the next hash, Abed.