Blockchain Governance 102
Tags: Blockchain, Bitcoin, Ethereum, Governance

Achtung! Crypto Legalese

Terminology is especially important in the context of blockchain governance, for at least four reasons:

First, mere usage of the term “governance” already triggers extremely complex socio-legal constructs like legitimacy, politics, law, en-force-ment, and so on. Second, these terms have context-specific meanings depending on whether they’re used in a tech-coder setting, or a law-coder setting, or a crypto-anarchist setting, etc. Third, even though CryptoLaw/crypto governance is mainly spoken in dialects of Americanized English Legalese, it would be a huge mistake to assume that this is the only language through which we need to study blockchain governance models. Chinese-, Russian-, French-language governance tracts are arguably as important as anything in Anglophone crypto legal theory, for obvious reasons having to do with truly global governance versus fragmented sorta-global governance [minus Russia & China]. Even casual governance-speak can alter “hard” governance rights. Even if unintended, references to governance decisions, preferences, rights can carry vast legal consequences. Need proof? Just ask Elon Musk how his plan to take Tesla private is coming along. One 420 Tweet, and you’re no longer chairman of Tesla.

Why Focus on Legalese?

After just a few brushstrokes, our critique is already sticky and legalistic. Is that really necessary? Can’t we just talk about governance without those pesky lawyers sticking their noses into crypto business?

The answer is very simple: No, you can’t!

It is not possible to talk about governance as “establishment, maintenance, revocation of legitimacy” without acknowledging Law as legitimacy, and vice versa.

There’s a ton of “law” in Blockchain Governance 101. Law features prominently in the inputs (e.g., trademark, IP law, jurisdictions, etc.) and a hyper-formal “Public International Law” regime is one of Zamfir’s five outlined governance outcomes.

For reasons we elaborate below, Law doesn’t feature nearly prominently enough.

You can’t do effective governance if you have FUD with respect to Law. Not saying Zamfir has Law FUD. Just saying that you can’t do good governance if you have Law FUD.

Simple Operational Logics

Blockchain Governance 101 covers both macro- and micro-, so-called “horizontal & vertical” governance issues. But wholesale treatment of blockchain governance in this way may be a bit loosey-goosey for some analysts and regulators (like Germans).

We propose the following operational vocabulary for blockchain governance, just to make it easier to do apples-to-apples, oranges-to-oranges analysis:

Intra-blockchain governance: the rules, practices, institutional constraints, and/or self-imposed processes for pursuing coordination, decision-making, and dispute resolution strategies within the context of a given blockchain organizational space (e.g., within EOS; within Ethereum; within IOTA; etc.); Inter-blockchain governance: refers to governance matters between blockchain/DLT development crews (ETC v. ETH; ETH-Bitcoin; EOS-IOTA; Stanford & E+5). Pan-blockchain governance: referring to governance matters that should be common to all blockchain/DLT platforms, such as, say, commitment to carbon-neutral implementation targets, etc. Supra-blockchain governance: refers to broader governance issues, rights, expectations that are platform-agnostic (echoing corporate/public governance regimes, including, e.g., rights of investors to inspect accounting records; rights of public to restrict projects that contravene clearly-articulated public policy; etc.) Private-off-chain governance: refers to contractual relations between blockchain development teams and various private/public entities (e.g., Ethereum-Amazon; IOTA-Volkswagen; etc.) Global governance: a system of formal and informal rules, practices, institutions that shape how the world is run. […]

Echoing Zamfir, if there are other terms we missed, or better definitions of existing terms that you would like to offer, please respond below.

Irrespective of whether you agree with the slightly revised framework or definitions, everyone should agree that it’s important to define terms because that is the only way that we can properly identify and define the problem.

Identify the Problem

Now that we’ve sharpened our usage and focus a bit, here’s Zamfir’s formulation of the problem:

[1] The process of legitimizing and delegitimizing things is a coordination problem, and it can be highly political when different participants want to coordinate around competing outcomes.

Now let’s restate this problem in sharper Legalese:

[2A] The process of legitimizing and delegitimizing things is a legal problem, and it can be highly political when different participants want to join armies to fight legal wars. … and/or … [2B] The process of legalizing crypto is a political problem, and it can be adversarial when different participants want to fight legal wars.

Now, let’s come up with the simplest restatement of the problem: