Answering Vitalik Buterin's 7 Hard Questions For the Blockchain World Part 7: Fundamentally Flawed Governance

Ethereum co-founder Vitalik Buterin put forward a series of open questions to the cryptocurrency community in a recent discussion with Mars Finance International WeChat group, postulating seven issues present within the blockchain ecosystem.

Erin's "Hard questions for any blockchain people" deal with some of the biggest obstacles that stand between the current state of blockchain technology and widespread adoption, highlighting hashpower centralization, the lack of "Useful" large-scale apps, the high frequency of hacks, scalability and latency, issues with consensus methods, and the inefficiency of on-chain governance.

"Given how EOS governance has turned into an epic fail, doesn't this mean that all on-chain governance including DAOs is fundamentally flawed? How can any DAO deal with bribe attacks, plutocrats, and other risks?".

The inherent issues present within the current blockchain governance paradigm are clearly presented by the outcome of the original DAO or decentralized autonomous organizations.

The original DAO was designed as an equivalent to a venture capital fund, supporting new blockchain innovation without the need for a centralized governance structure.

Erin posits in his final question that the future of blockchain governance is fundamentally flawed - it's not possible to fully decentralize governance, as there will always be hackers or attack vectors present within a governance structure that could potentially cause catastrophic failure.

DAOStack is a more sophisticated, nuanced interpretation of the original DAO, favoring a modular approach to governance structure that allows participants to collectively vet governance elements for functionality and security before implementation.

Ralph Merkle, one of the inventors of public key cryptography, proposes a blockchain governance structure that implements Robert Hanson's "Futarchy" structure where network participants define values, with prediction markets used to decide what actions will maximize those values and incentivize network participants.

The blockchain paradigm shift represents a wholly unique stage of human development - there has never before been a time at which thousands of different governance structures can be tested simultaneously, at such high speeds.

Blockchain governance development may currently be at a nascent stage, but a Cambrian explosion of governance experimentation is currently underway.