The Blockchain Technology Underlying Bitcoin and Ethereum is The Next Generation of the Internet Say New WEF Paper – Trustnodes

The Blockchain Technology Underlying Bitcoin and Ethereum is The Next Generation of the Internet Say New WEF Paper

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The World Economic Forum (WEF) says blockchain technology can give rise to “a new internet era even more disruptive and transformative than the current one,” according to a press release introducing a new white paper, Realizing the Potential of Blockchain, published by the World Economic Forum today.

The paper says blockchain technology can “generate unprecedented opportunities to create and trade value in society,” but it may require “the formation of a multistakeholder consensus on how the technology functions, its current and potential applications and how to create the regulatory, cultural and organizational conditions it needs to succeed.”

“A smooth future for the Internet of Value won’t just happen; it will be achieved. Today, most stakeholders are focused on building their own companies, organizations or platforms and are paying little attention or devoting little effort to the challenges of building a healthy ecosystem. But… every organization should assign resources, however small, to participate in community self-governance.”

The paper goes through past events, including the Slockit DAO, to argue that better governance is needed to address challenges in a timely and orderly manner, with Jeremy Millar, Founding Board Member of The Enterprise Ethereum Alliance and Chief of Staff at Consensys, stating:

“The Enterprise Ethereum Alliance was established to meet the governance needs of large enterprises, who face regulation, significant reputational risk and stringent IT requirements without impinging the pace of innovation and open-source collaboration.”

How to achieve such governance however is not an easy question, with the most pressing issue for ethereum specifically being the ICO boom that has funded numerous projects to the tune of more than a billion dollars:

Top ten tokens according to WEF’s whitepaper.

One solution may be ConsenSys capital which could go some way towards addressing concerns. Details are sparse, but the idea appears to be for ICOs to voluntarily submit to due diligence checks by an arm of Consensys, potentially for a fee.

Things would of course still go wrong. Enron and Lehman Brothers collapsed, for example. But hopefully they would do so less than otherwise, with ICOs that have undergone ConsenSys due diligence potentially attracting more serious consideration, while those that don’t would be seen as suspicious if there is no good reason for their failure to undergo the due-diligence process.

The WEF whitepaper, however, refers to more protocol level matters, such as how ethereum can ensure a smooth transition to Proof of Stake, which is a very different aspect, with any solution that diverges from the framework that developed during the Slockit DAO hardfork requiring a high level of sensitivity while most probably courting controversy.

That’s because ethereum’s solution seems to be: let them fork. Rather than imprisoning dissenters into one eth to rule them all, ethereum seems happy to give them the freedom to create their own minority coin to be judged by the free market.

That worked incredibly well during the one data point we have, the Slockit DAO fork, as even the minority coin is now worth more than eth was at any time before the fork, with eth itself worth 10x or 20x more than before the fork.

The market’s judgment, therefore, seems to be that the split was actually the best thing to have happened to ethereum, so any dispute in ethereum’s public blockchain will probably be addressed in a similar manner.

First, a token holders vote, which is or should be decisive in most cases. Then a miners vote, which will probably largely reflect the token holders and if not we’d have to seriously consider why.

If it does reflect it, then developers merge the code token holders voted for and probably should make it default if their vote is above 70%. Then the actual upgrade, and if minority wants to continue in the older chain then the market decides their value.

Any further layers on this governance would need to have a very clear and transparent set up, without any one point of failure or say, and with very persuasive arguments of how exactly it would make the current operational public blockchain governance better in the case of ethereum.

As for private blockchains, they of course have the freedom to operate as they please, as well as co-operate with each other and with public blockchains since everything remains at laying down the rail-road tracks stage.

These different governance models are probably necessary at this stage as blockchain technology has the ability to generate unprecedented opportunities to create and trade value in society because of the way blockchain leverages a global peer-to-peer network to guarantee integrity of the value exchanged among billions of devices without the need for trusted third parties.

It is distributed trust generating nodes that validate, process, and make decisions on upgrades for public blockchains, which ensures the system is open, global and peer to peer without trusted third parties, thus giving rise to many benefits.

That needs to be maintained for the open public blockchain, with any human level layer best avoided as it would probably create a single point of failure that may slow things down at this very nascent stage.

In 20 years, in 30 years, perhaps there should be some committee somewhere with their own bureaucracy as by that stage blockchain technology should have sufficiently matured to in effect become boring.

But we are no where near that stage. There are many difficult questions which need to be organically addressed as experience develops because no one can currently say in a top down manner what should or should not happen during any slightly controversial network wide determination.

 

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