Blockchain technology has proven its concept. The idea of the distributed ledger has been touted across the globe as having the potential to revolutionize value exchanges as significantly as double entry bookkeeping did 700 years ago in Italy. Numerous projects are expanding the space in multiple directions. New use cases are slowly but surely trickling into mainstream industries. However, there is no centralized authority overseeing the flourishment of the entire ecosystem. Ironically, the advantages of decentralization have been stagnated by a lack of centralized coordination.
In an effort to boost inertia, The World Economic Forum (WEF) has released a new white paper that outlines a proposed solution to solve the problem of blockchain governance. The 40-page study titled Realizing the Potential of Blockchain: A Multistakeholder Approach to the Stewardship of Blockchain and Cryptocurrencies was composed by the father-son team of Don and Alex Tapscott, and encompasses their shared expertise of blockchain systems as well as multistakeholder governance. Through this mechanism, the WEF, in conjunction with its San Francisco-based thinktank, the Center for the Fourth Industrial Revolution, is attempting to highlight why stakeholders with different interests in the cryptospace should work together to solve problems that are too large for any single actor to decipher alone. Per the report:
“A distributed ecosystem need not be a disorganized one, and improved governance need not imply formal governmental legislation or regulation. A cooperative process of multistakeholder dialogue and stewardship can go a long way in improving trust and helping new technological systems develop in a socially beneficial manner.”
The report recognizes how blockchain technology is creating a dramatic shift online from an internet of information to an internet of value. According to the report, the awakening of dormant assets in this new internet of value will require, not one, but three levels of stewardship: the platform level must overcome significant issues pertaining to scalability, energy consumption, and crisis management; the application level is in dire need of oversight and skilled developers to build user-friendly interfaces; and the overall ecosystem level is lacking a comprehensive legal structure and regulatory constraints. The report further outlines the eight types of stakeholders that must come together to solve the problems associated with the three levels of stewardship.
The groups of stakeholders are defined as: innovators, venture capitalists, banks and financial services, developers, academics, non-governmental organizations, governmental bodies, and users or citizens. According to the WEF report, these different types of stakeholders can be incentivized to collaborate by adhering to the previously established Global Solutions Networks (GSN) framework. This framework essentially organizes diverse, and sometimes competitive, stakeholders into an effective partnership that aligns individual goals behind a four-step process that benefits all. This process first unites diverse stakeholders, then defines and addresses a global problem facing them all. Next, the privy parties leverage solutions from the digital revolution and organize outcomes around a system of self-governance. Per the report, networks that organize themselves around these four principals will most likely fall into seven camps: knowledge networks, policy networks, advocacy networks, operational and delivery networks, networked institutions, watchdog networks, and global standards networks.
There is a great advantage to building industry partnerships. Vinton Cerf, co-creator of internet 1.0, the Internet Society, and the Internet Engineering Task Force, has publically stated that a good starting point for the true growth of blockchain technology would be to create “birds of a feather.” Although the current ecosystem is being defined by those scrambling to carve out individual niches, the future of the ecosystem may hinge upon the efforts to bring diverse groups together. This is surely how all human progress is truly made. Per the report:
“The extent to which this new technology realizes its potential will depend in substantial part upon how well stakeholders steward its development. There remain important open governance questions regarding both the functioning of the technology and its current and potential applications.”