Crypto Governance: Why It CANNOT Be Ignored!!
💪The Power Of Community Governance💪
About 100 years ago, it was popular for communities in some western countries to form fraternal or ‘friendly’ societies to collectively fund their own healthcare. A single day’s wage could cover a year’s worth of basic medical care. Unfortunately, these societies disappeared due to government regulations
Off-chain governance is common among proof of work cryptocurrencies such as Bitcoin, Litecoin, Monero, and also Ethereum for the time being. One off-chain governance process some of you are familiar with are improvement proposals posted by crypto community members on GitHub for everyone to see and discuss If you want to make a big change to a proof of work cryptocurrency like Bitcoin, the economic majority must be in favor of the change. This includes Bitcoin miners, Bitcoin developers, and also BTC holders
On-chain governance is common among proof of stake cryptocurrencies such as Polkadot, Solana, Terra, and eventually Ethereum after 2.0 rolls around That said, on-chain governance is not limited to cryptocurrencies. On-chain governance is frequently leveraged by decentralized applications, especially DeFi protocols Smart contracts which define and enforce the requirements for tabling, passing, and rejecting proposed improvements. Some of these set ups can be extremely elaborate as they are entirely on-chain
👨💻How DAOs Can Replace Governments👨💻
According to Ethereum founder Vitalik Buterin, the main thing that’s missing from cryptocurrency governance structures is a mechanism for properly funding public goods. Public goods are the things that governments are supposed to provide. This includes stuff like roads, bridges, police, firefighters, military, elections, regulations and various administrative practices One solution is quadratic funding which is based on the idea that if multiple people are allocating money to a particular thing, that thing is worth more than the sum of the money being poured into it
🆔DAOs And Decentralized Identity🆔
Rather than entrust the user verification mechanism to a centralized party, we can use decentralized identity solutions instead Though there are many cryptocurrency projects currently working on this, they all work in more or less the same way, and that’s to have someone else using the app or dApp verify your identity This can be something as simple as meeting up in person or having a video call online, and many of these decentralized identity solutions don’t even require any form of ID.
📜 Disclaimer 📜
The information contained herein is for informational purposes only. Nothing herein shall be construed to be financial legal or tax advice. The content of this video is solely the opinions of the speaker who is not a licensed financial advisor or registered investment advisor. Trading cryptocurrencies poses considerable risk of loss. The speaker does not guarantee any particular outcome.