Abstract
The blockchain revolution upholds the decentralizing ideal of “control nothing.” It is natural that such a pursuit would face issues of governance that demand reasonable control; control that is both operational as well as adaptive in nature. Eliminating middlemen and handing over controls to a trusted system of trustless agents does not thereby bestow trust across time. This is especially true when relentless change is the order of the day. Issues of governance rise up when blockchain systems (especially those that have embedded smart contracts) are forced to operate increasingly away from their original intent. Smart contracts need governance when beset with the problem of the unknown-unknowns. Guided by the axiomatic approach, this paper looks at the paradoxical issue of blockchain governance from a Complex Adaptive Systems (CAS) perspective that helps frame the fundamental problem of decentralization. The objective is to solve the Blockchain Governance Kernel Design. Real-life examples are used to illustrate the findings.
Highlights
Governance is about collective decision-making, and may be defined as in [32] as follows: “Governance is about the rules of collective decision-making in settings where there are a plurality of actors or organisations and where no formal control system can dictate the terms of the relationship between these actors and organisations.”
If it is designed for scaling, it ought to cover for the variety of knowledge asymmetries that exist across the spectrum of participants as well as the dynamics along a fastmoving front
Given the leveling of the playing field, the disintermediation of the middle-men, and the transparency of blockchain-based transactions, it is highly likely that the information flows are on the verge of scaling exponentially
Summary
Design of the governance kernel of socio-technical systems is a challenge of the first order. Design (be it technical, social, or socio-technical) requires governance--since it needs to account for the human element. As we shall see, the kernel design for both of these governance systems may be obtained via a surprisingly similar lower-triangle arrangement of heterarchical hierarchies This is because in both cases, governance does reduce to the problem of unknown-unknowns in the context of knowledge architectures that operate either at the agent or the institutional level. Biological as well as blockchain-based socio-technical systems may be studied under the rubric of CAS (Section 7) to help elicit issues of decentralization, self-organization, emergence, etc. Section helps reduce the problem of governance (both agent level as well as institutional) to the heterarchicalhierarchy of knowledge architectures.
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