Decentralized Governance for Blockchain and Crypto Regulation?

Sometimes we need not wait for something we know deeps down must be done...

?Just when we thought we have seen it all, the unexpected happens. I guess at this rate, one should expect anything, so long we continue to put trust in people and centralized systems. The essence of blockchain technology is to enable transparency and decentralization of decision-making, and blockchain technology's road to broad adoption is 1000km and we've barely completed a hundred meters despite all the rush and races. The essence of blockchain technology is that it enables the creation of secure, transparent, and efficient digital ledgers that can be used to track and record a wide range of transactions and data without the need to trust centralized third parties.

We have seen our share of hostile takeovers in a single year as FTX destroyed Luna and Binance CZ defeated FTX with a lot of rumors currently around Binance looking like a never-ending circle. It reiterates and creates a perfect realism for the Elephants fighting while the grasses suffer story. Unexperienced and horrible people with great dubious ideas entrusted with people's life savings. We all know how the story ended. But that wasn't the beginning, was it? Many of us don't remember, so let me reiterate the following:

1.??????The collapse of the Mt. Gox exchange in 2014: Mt. Gox was once the largest cryptocurrency exchange in the world, but it collapsed in 2014 after being hacked and losing nearly 850,000 bitcoins belonging to its customers. This was a major blow to the credibility of the cryptocurrency industry, and it led to a sharp drop in the price of bitcoin.

2.??????The rise of ransomware attacks where hackers encrypt a victim's data and demand payment in Bitcoin to restore access. These attacks have caused significant damage and have increased concerns about the potential for criminal activity in the cryptocurrency space.

3.??????The ICO bubble In 2017, where companies earned people's trust and raised money by selling their cryptocurrencies. However, many of these ICOs were scams, and the bubble eventually burst, resulting in significant losses for investors.

4.??????The Bitcoin Cash hard fork In 2017 resulted in significant controversy and a divided community, with some arguing that the hard fork was necessary to improve the scalability of the Bitcoin network, and others arguing that it was a power grab by certain individuals.

5.??????The QuadrigaCX scandal In 2019 resulted in the loss of hundreds of millions of dollars worth of customer funds. It was later discovered that the exchange's CEO had died, taking the password to the exchange's cold storage wallets with him, leaving customers unable to access their funds.

6.??????The "DAO" hack in 2016 and millions of dollars worth of ether were stolen.

7.??????The Bitfinex hack in 2016 led to the loss of over 120,000 bitcoins.

8.??????The Cryptopia hack in 2019 led to the loss of millions of dollars worth of various cryptocurrencies.

9.??????The NiceHash, Slovenia-based cryptocurrency-mining marketplace in 2017 lost around 4,700 bitcoins to a hack, worth around $62 million at the time.

10.??The hacking of the Coincheck cryptocurrency exchange in 2018, resulted in the theft of over $500 million worth of cryptocurrency.

Overall, the history of cryptocurrency has been marked by several major setbacks and controversies, which have raised concerns about the security, reliability, and integrity of the cryptocurrency industry. Mostly all these were due to the lack or inadequacy of true decentralization and trust in central authorities. Surprisingly, despite these challenges, the cryptocurrency market has continued to grow and evolve, and it remains a potentially transformative technology with a bright future ahead. Now imagine the possibilities if we have a true regulation that empowers further adoption protecting everyone's interest. Imagine with future with all-encompassing decentralized governance with a focus on regulation.

Decentralized governance with blockchain refers to the use of blockchain technology to enable decentralized decision-making and problem-solving within a community or organization. This means that rather than relying on a central authority to make decisions on behalf of the group, members of the community can use blockchain-based systems to collectively come to agreements and make decisions. This can be especially useful in cases where there is a need for transparency and accountability, as well as in situations where a central authority may not be trustworthy or impartial. In a decentralized governance system with blockchain, decisions are made through a consensus-based process, where members of the community can propose solutions to problems and vote on them using the blockchain. This allows for a more democratic and decentralized decision-making process, which can be more efficient and effective than traditional methods.

My perspective of viewing this is that the customers using your ideas or Dapps don't make you in charge of keeping their funds nor make you a CEO which is a right earned by vote. A governance node can easily be revoked by vote if evidence of improper conduct is discovered with evidence. Being your Dapp entitles you to run a governance node, and also earn royalties on accumulated fees all started in the contract. With a decentralized governance system based on blockchain, all concerned parties could propose and vote on different rules and regulations on-chain. This would allow for a more democratic and transparent process, where they all have an equal say in decision-making. The blockchain-based system could also provide a secure and auditable record of the decision-making process, ensuring that the results are fair and transparent.

Decentralized governance has emerged as a critical component in the adoption of blockchain technology and cryptocurrencies. In recent years, we have seen an explosion in the use of blockchain-based systems and cryptocurrencies, with many individuals and organizations recognizing the potential of these technologies to revolutionize various industries. However, one of the key challenges facing the widespread adoption of blockchain and cryptocurrencies is the lack of a clear and effective governance structure even in regulation. How about having a decentralized regulatory body which from where I stand can mostly happen on a custom-based multichain architecture because interoperability will be a necessity for such systems to scale.

To be continued….