Blockchain governance is the system of rules and processes that guide the operation, management, and evolution of a blockchain network. It encompasses all aspects of the blockchain’s functionality, including its core protocol, consensus mechanism, changes to the code, and the decision-making process for future developments. Effective governance is crucial as it ensures the blockchain operates smoothly, remains secure, and adapts to the needs and desires of its stakeholders, which includes users, developers, miners, and investors.
At its core, the purpose of blockchain governance is to provide a structured approach that aligns the interests of all parties involved and supports the long-term sustainability of the platform. Governed by either on-chain mechanisms—rules that are encoded in the blockchain protocol itself—or off-chain strategies that involve the human elements of governance, the models can vary significantly from one blockchain to another. Understanding how governance works in the context of blockchain technology helps stakeholders to better engage with and contribute to the ecosystem.
Key Takeaways
- Blockchain governance establishes the rules and processes for maintaining a network’s operation and development
- Governance models differ and involve both on-chain protocol mechanisms and human-led off-chain strategy
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