breaking down governance: process and content

sep 14, 2018

Note: this is the first post in a series of posts where I try to write 500 words everyday. Others will appear on this site as I get to them.

As I continue my deep dive into crypto-governance, I see a lot of conversations around the same sorts of things, even if everyone uses slightly different words to talk about them. Here, I’ll lay out some of the broad strokes of what we mean by “governance.” With common fundamentals in place, we can all have a framework to help guide us when we inevitably get distracted with the emotional content of contentious issues. There are two main concerns when we talk about governance: the content of governance and the process of governance.

The content of governance refers to the thing we are trying to figure out: what problem are we trying to solve or decision are we trying to make? Pretty much any decision that arises in an organization (which is in some sense the only thing an organization really does) revolves around some thing the members of the organization cares about and this thing is the content of that instance of governance. The particular instances of “content” can actually be quite banal and usually point to some deeper underlying issue. We saw a great example of this with the Bitcoin/Bitcoin Cash hard fork: a large part of the debate was at first pass about block size and how that affects network scalability. The reason it was so contentious was that the size of the blocks impacts how decentralized the network could be and in doing so challenges every participant’s values around what decentralization means.

The process refers to the methods and means we use to actually move forward on the question at hand. A simple example of a process is in a dictatorship: there is one person calling the shots and everyone listens to that one person without any questioning or debate. Another example of a process is the techniques employed to carry out decision making in a representative democracy, where a body of delegates votes to make decisions on behalf of their constituents. Everyone loves to critique a given process and it is true that the way you do something can make a big difference on the outcome. This fact is underscored in governance because the entire point is to make decisions in a way that maximizes personal outcomes. Under this constraint, everyone by definition feels like their opinion is a relevant input because they are directly going to be affected by the result. With skin in the game, you are motivated to point out any perceived unfairness in the process. In crypto, we see a good example of this where critics will quickly jump to point out that cartels form in systems with delegated voting like Lisk or EOS. The cartels represent a chance for abuse of power given their position on the network and in fact this behavior is openly encouraged (see for instance). This potential for abuse stands in strong contrast to the ideals of decentralized technology we all claim to be striving towards.

There is a final piece of any governance which is part of the process but important enough to be called out independently: prioritization, that is how do we decide where to apply the process? Examination of this question quickly gets us into meta-governance territory which I’ll leave for another time. I think we can all agree however that if you don’t have a good way to tell what is important right now, it won’t matter how good your process is or how impactful the content of the decision may be.