Who is a blockchain for?
Much has been discussed around the technical aspects of a blockchain and the merits of the technologies used, the consensus models, the miners or validators who underpin the chains, the tokenomics, and last but not least the token holders.
What is often overlooked is the community or society that coalesces around a blockchain and what the blockchain is being run for.
Let’s begin by looking at the various elements of the community around the blockchain to understand their part in making a success of a chain.
The developers
These are the people who write the code, peer review, test it and get it ready for deployment. The developers can be the leaders of the project if they are solving a technical problem such as writing a blockchain designed as infrastructure which would facilitate other businesses to be built on. Largely they will be the team behind a business minded set of co-founders who have an idea around an application.
The miners or validators
The people who run the blockchains, as a group they are not necessarily known to each other and they compete with each other in the case of mining to get rewards from the work they do, and in validating in being selected to sign blocks. Importantly they secure the network, and are honest (and even if they are dishonest then assuming the chains are well designed it is not economically viable to act on).
The miners or validators have the expertise to run nodes securely and handle the traffic and in return are rewarded for their effort.
Importantly they chose to implement the software in the case of an upgrade.
Token holders
People who buy the token looking for capital returns or a yield where they stake or delegate their tokens. By buying tokens they bring funding to a project and make it happen.
Governance
The people who ensure the written constitution is upheld. Governance varies among blockchains, with degrees of control (and centralisation) and performs an important role in the orderly running of a chain.
Businesses
With the exception of chains who have the sole purpose of transacting tokens (such as Bitcoin) most chains have an angle on building the infrastructure through smart contracts or facilitating businesses to build applications on the chain.https://github.com/confio/cosmwasm/issues/74https://github.com/confio/cosmwasm/issues/74
Competing interests or a common goal?
In thinking about this article, the quote taken out context by Margret Thatcher (former British Prime Minister) came to mind when she said “There is no such thing as society” what she was referring to was that society is made up of individuals, and families and as such you cannot blame “society” but that individuals and families should bear responsibilities for their behaviour and interactions.
To paraphrase “There is no such thing as Blockchain” is an interesting starting point, and as identified there are a set of participants that make up a chain. To extend this thought the “blockchain” is a collective as is society but the components that make up a blockchain all bear responsibility and equally should share in the rewards.
As with any collective, or society there must be a level of cooperation, compromise and shared vision, the question is whether this applies to blockchain?
There could be a case where a bunch of miners and validators are happy running a chain as the ROI is at a level they find acceptable, but if the ROI drops to a level they find unacceptable at that point their infrastructure is switched to another chain , the chain then becomes vulnerable. Using this example, it could be argued that the miners or validators do not care about the blockchain as a whole, but all that interests them is the ROI and that it is easy to switch between them.
By contrast a miner or validator set who are aligned to the longer term interest are always striving to improve and the proposals to amend the chain are active and well discussed, sure the financials are important as nobody wants to run a network for some higher purpose or for some altruistic reason.
The motives of the developers vary, some are teams paid for by an organisation who raised VC money or through an ICO, others are open source contributors. What drives the developers is the tech, striving to improve the code, and being involved in the blockchain world. Where it can go wrong is if the developers get stuck with a project or find a shiny new one to go to. There can also be a situation where they take a blockchain in a direction that is at odds with the validators or miners.
The token holders have an interest either in a steady return from staking or from a capital gain. There are many reasons why people invest in tokens, but generally there is a balance of risk vs reward and the token holders are clearly prepared to risk their capital given the track record of blockchain projects. A cynical view is that the token holders care about the value of their tokens above anything else and will stay invested as long as the believe that. It is more nuanced than that, of course the token holders will look for a return but there will also be some motivation to be involved and support the projects.
The important player in the blockchain is the businesses that run their businesses/dApps on the blockchain. These are the guys that generate the transactions which feed into the validators and miners and keep the economy going. The businesses can be a bit sidelined when token holders, validators and the developers have a short focus on what they are doing and forget about the fee generators.
The governance of a chain is set by a constitution and the governing board ensure the blockchain is run according the rules. The governance function may be a subset of the validators, developers or token holders. They are in a position to hold back innovation and can stifle change or only push through changes which benefit a single group, such as the token holders or the validators or miners.
All of the parties as we have seen can either focus on their narrow interests or work together for the long term benefit of the chain to be a robust, decentralised blockchain.
Who sets the long term goals?
The long term goals are meticulously laid out in a white paper and there are often eye catching infographics showing which chunks of functionality will be delivered by when. It is important to have a good, clear vision of where an organisation is heading, but the reality is that some of the ideas laid out can be much more complicated than anticipated or that there were some big unintended consequences introduced. Software isn’t commoditised enough to be an exercise of plugging ready built modules together with a nice configuration file, blockchain is not a mature platform, and the high level ideas in a white paper do not translate into firm business requirements that can be implemented.
The challenge then becomes whether to rigidly stick to the letter of the whitepaper even though it will lead to missed targets or should it be seen as an organic, evolving project. If there is an evolutionary aspect then who decides the path? The governing board? The developers? The token holders? The miners or Validators?
This is where it gets interesting! Do the various parties propose changes for their interest group or do they come together to develop a long term theme? The successful chains are built on strong communities with support across the various parties, although not in all cases there are some chains that continue to operate with a small active group but are less inclusive.
When everything lines up
What does a good community look like? There are strong communities around the major chains or they would not last the course.
What Polkadot, Holochain, Near, Cosmos and Regen all have in common is a wide range of channels that are current, and sensible debates covering the key topics of validators, business, and introductions to people new to their chain or business.
There is a clear vision that follows the direction set in the whitepapers, although the community is strong enough to adapt and develop the path for the businesses.
What will be interesting to observe how these communities behind the successful projects coalesce over a longer period of time and what structures will be built.
