Making Sense of Blockchain Governance Applications

11 November 2016 | on governance

https://www.parliament.uk/about/art-in-parliament/news/2010/earl-of-strafford/

Note to reader: This article also appeared on Coindesk on November 11, 2016. In this article I describe some basic theory on how blockchains can be used for governance.

Governance has long been one of the most-hyped applications for blockchain technology. However, there's often little clarity about what "governance" means in this context. The term is used to encompass applications ranging from secure online voting, to new forms of political governance, to flawed experiments in decentralized investment funds.

First, let's be clear about what we mean by "governance". Most often the term brings to mind political governance. The institutions that, according to a system of rules and laws, make up our various levels of government. Political governance includes processes like democratic elections, votes held by representative bodies like parliaments, and the particular responsibilities and powers given to different institutions.

We might also think of corporate governance: the processes used by corporations to make decisions. Corporate governance includes processes like shareholder votes, board meetings and the different levels of power and responsibility given to executives and committees.

Both of these are applications of a common set of tools designed to facilitate group decision-making. Rules, laws, institutions, processes, rights and customs that, used together, become a system that enables organizations to make decisions. Applications of governance range from highly complex systems like nation states to very simple ones – say, a private club with a simple majority voting mechanism for approving new members.

This is what I mean by "governance" for the purposes of this article – the processes and systems used to facilitate decision-making in any organization.

Note that this doesn't refer to a particular use of those tools. Governance systems can be designed well or poorly, they can be effective or not and they can be just or unjust. But, the set of tools that lets us build any of these systems share common features, and it is the tools that might be improved by the various projects, products and technologies that make up the category of "blockchain governance" applications.

The technological requirements of governance

Any governance system requires certain basic technologies.

First, it requires a way to record a set of rules. Rules like who gets to vote, who gets to sit in parliament or who has commit access to a codebase. These rules have to be recorded somewhere securely so that they can't be lost, destroyed or forgotten. Importantly, we must also be able to verify that a given rule is the real rule, and not fraudulent.

Second, there must be a way for people to interact with the rules. For instance, if a rule gives you the right to vote, then you need to be able to exercise that right. You need an election: poll workers, voting booths, paper slips, vote-reading machines and other technologies required to facilitate voting. If there is no way to interact with a rule, then the rule can't serve its purpose in the overall system.

Third, governance systems require a way to enforce the rules. What if someone cheats? What if they vote twice, or refuse to give up power when their term is up? There must be a way to compel individuals to follow the rules, otherwise the rule is again hollow. Existing governance systems use different tools to enforce their rules, like social norms or legal systems.

Let's look at a simple example: a small charitable non-governmental organization (NGO) with a three-member board. The NGO receives funds from sponsors, and must decide how to spend the money to achieve its mandate.

Its rules are contained in a simple constitution that sets out the purpose of the organization, as well as articles of incorporation and bylaws that contain the rules that define how decisions are made. The NGO keeps a copy of these rules, and so does its lawyer, who serves as a trusted third party – a way of ensuring that they can always be certain about what the "real" rule is. To interact with those rules, the board convenes meetings where votes are carried out and recorded. Third, the bylaws are enforced – if necessary – by the legal system of the jurisdiction in which the NGO is registered.

Applying blockchain technology

Blockchain technology offers an elegant new way of accomplishing these three basic functions of governance.

First, blockchains are ideal for recording information in a way that can be later verified as authoritative. Information stored on a blockchain is distributed, meaning it is very difficult to destroy completely and very easy to access. Anyone can verify for themselves that a given entry on a blockchain has not been altered since it was created and verify that it was created through a particular process.

Let's return to our NGO example and suppose it has a rule where the votes of two-thirds of the board members are required to approve any expenditure over $1,000. We could simply store a hashed copy of that rule written in plain language on a blockchain and then later be able to cryptographically prove that the rule we are reading is the same one we placed there and that it has not been altered since.

Second, blockchains provide a new way for people to interact with the rules directly. To do this, we wouldn't simply store a copy of natural-language rules like in our example above. Rather, we could take this a step further and express the rule in code. Using what is commonly known as "smart contract code" technology, some blockchains allow users to create logical scripts that are executed by the blockchain itself.

Instead of recording our NGO's rule in natural language, we could express it as a simple computer program. The program would receive a spending proposal as an input, check to see if its value is more than $1,000, and then trigger a vote. The program would receive inputs in the form of signed votes, count them, and then determine whether there was a majority. If two out of three board members have voted "yes", then the program would automatically send the funds to the recipient defined in the proposal.

Crucially, we have already achieved our third requirement – enforcement. When the rule is expressed as executable code, the rule can be enforced at the same time it is exercised. So long as the code can control the assets subject to the rule, then the rule itself executes the outcome.

While they sound mundane, these basic features form the building blocks of any governance system. The fact that they can be achieved – even in a narrow sense – through the scripting capabilities of blockchain networks opens up new possibilities to augment existing governance systems or build entirely new ones.

The larger context and limitations

Blockchain governance applications are an extension of the technology's general capability to execute rules defined in code. This capability is most often discussed in the context of "smart legal contracts", where blockchain code is used to augment traditional legal contracts. In that context, blockchain code is used to store and enforce rules as agreed to between two parties to a commercial relationship. Here, we are using the same technology – blockchain code as rules – and just applying it to a slightly different use case.

In a commercial contract, the parties are agreeing to a set of rules designed to facilitate trade of some kind. In a governance system, the parties are agreeing to a set of rules that will help them cooperate and make decisions together. In either case, the ability of blockchain smart contract code to "enforce" its own rules is a powerful capability, though it comes with limitations.

The first important limitation is what can actually be controlled by a blockchain governance system. In our example above, our blockchain-enforced spending limit rule was useful because the rule itself can have control over the funds at issue. Once the votes are in, the money is sent. This is possible because we are assuming that the NGOs funds are in cryptocurrency, which can be directly controlled by blockchain smart-contract code.

But if the thing being controlled by the governance structure was something else – US dollars, or a physical asset like a vehicle – our solution can't be as easily automated. We could hold a vote through our system, but ultimately some person would have to enforce the outcome of that process by making a bank wire or transferring legal title of the car.

Over time, we should expect that other types of assets – like fiat currency, or vehicle registries – will be integrated with blockchain systems, which will expand the utility of blockchain governance systems.

Likewise, if our governance system is primarily concerned with controlling access and permissions within some other system (eg: over a codebase, or within a private Internet forum), then the utility of our blockchain governance system depends on whether the blockchain-enforced rules can control the permissions or access in those systems. This, too, is a barrier that will quickly be overcome as platforms are built that integrate easily with blockchain technology.

Putting existing use cases into context

Keeping in mind our analysis above, how do the various projects that fall into the category of "blockchain governance" relate to one another?

Some of these projects aim to simply provide a user a set of tools they can use to build their own governance systems. Boardroom, for example, is a suite of "governance components" that a user can take and structure however they want. Using pre-built default code contracts – things like votes, proposals, boards and committees – a user can more quickly build something that fits their particular needs.

The point of the product isn’t a specific type of governance, but rather just providing the tools needed for users to build their own governance structures. Our NGO above, for example, could use Boardroom to build the simple governance system we described.

Other projects attempt to build new types of governance systems that take advantage of the unique strengths of blockchain technology. The most obvious of these strengths is that blockchains are decentralized – there's no central party required to maintain the system or "enforce" its rules. This makes it possible for governance systems built on blockchain networks to themselves be decentralized, with no central party.

The best known project of this kind was The DAO. The DAO, which stands for decentralized autonomous organization, aimed to be a user-controlled venture fund. It raised funds by selling tokens, which granted holders of those tokens certain rights in its governance system. Token-holders would then vote on proposals submitted to the DAO and decide where it should invest its funds. The DAO had no legal entity and no bank account – it was governed entirely through blockchain code.

It was an audacious plan, and it's unfortunate that it failed as quickly as it did. Critical security flaws in its code let an attacker siphon away The DAO's funds, destroying confidence in the project and leading to an elaborate game of cat-and-mouse as The DAO's creators tried to salvage their project and recapture the funds. As an experiment in smart-contract security practices, The DAO was a failure. But, it was also an experiment in whether a governance system of this type – a decentralized venture fund – could succeed in the marketplace. The failure of the first experiment unfortunately means the second wasn't truly tested.

A third type of blockchain governance application is aimed at solving the practical problems facing traditional enterprise as they adopt blockchain systems more generally. For instance, consider the governance challenges facing consortium blockchain projects.

Many "enterprise" blockchain systems being explored today take the form of a permissioned blockchain network that is shared between entities – a consortium. The nodes that make up the permissioned blockchain would not be maintained by the public, but rather by each participating institution. For instance, a shared blockchain ledger maintained by several banks that enables them to more easily settle cash balances between themselves, or a shared blockchain ledger that tracks ownership of financial assets like shares, derivatives, or bonds.

One challenge facing institutions as they work on these projects is how they will be governed. If there is no central entity that will "own" the ledger – indeed, this is part of the value of this approach – the participants must be able to govern it jointly. Not only is this politically difficult (coordinating among competitors with different priorities is never simple), it's a practical problem as well. There must be a process, mediated by the code itself, through which the consortium makes critical decisions, like voting to add new members or removing existing ones, or upgrading the code over time. More than our other examples above, this will require careful integration of the blockchain-code components that govern the rules of the system and the traditional governance and legal requirements facing financial institutions.

Within "blockchain governance" we can usefully distinguish between at least a few categories, illustrated by the examples above. There are projects that aim to simply provide the tools of governance, like Boardroom. Then there are blockchain projects that are using those tools to build particular forms of governance. The DAO sought to build an entirely new form of economic entity made possible by blockchain governance.

Others have more modest aims, and are designed to solve the particular problems introduced by the adoption of blockchain technology – like those facing consortium projects. These use decentralization in a more limited sense: to enable a smaller group of participants like banks to jointly govern a shared piece of financial services infrastructure, with no centralized entity.

The bigger picture

Blockchain governance systems matter because they have the potential to permanently lower the cost of creating and maintaining governance systems of all kinds.

Governance is valuable, and the systems that make it possible are expensive. Corporations spend large sums ensuring that their internal governance processes are followed, and they spend even larger sums settling lawsuits with shareholders or regulatory agencies when those processes are not followed or are inadequate.

For organizations in jurisdictions with weak rule of law, the challenge is even more stark – the institutions necessary to ensure basic political or corporate governance may simply be unavailable without relocating to a different country. Access to functional governance systems is a barrier to entry for all kinds of organizations, ranging from companies to political parties to charity organizations.

Blockchain governance systems could, in some circumstances, serve as a foundation for less expensive, more efficient and more automated governance. This could reduce the regulatory burden on existing political and corporate governance systems and give others access to enforceable, verifiable governance systems where they were not otherwise feasible.

It seems odd to think about governance as dependent on, or intertwined with, technology. But it's certainly true that technology shapes, to some degree, the possible range of governance systems available to us. The possibility of modern democratic governance depends on the transportation and communication technologies that make it possible for millions of people to engage in secure democratic elections, and for a centralized bureaucracy to manage a nation with millions of citizens.

Blockchain governance systems won't usher in a utopia, up-end the modern corporation or replace all of our existing governance methods. There are many aspects of governance that cannot be replaced by, or obviously improved through, technology. A governance system written in code can be designed just as poorly as one written in ink. But at a minimum, we’ve expanded the basic governance toolkit.

Building the Foundations for a Scalable Ethereum Community

28 August 2016 | on governance, ethereum, policy

https://imgur.com/a/GfPtr

Note to reader: This article also appeared on Coindesk on August 28, 2016. In this (long!) piece I recap the aftermath of the DAO hack, consider arguments for and against implementing a governance structure over the Ethereum network, and suggest some practical ways to move forward.

Recent events have forced ethereum's community to the forefront. On 17th June, a critical security vulnerability in an ethereum application called The DAO was used to drain millions of dollars worth of ether into accounts controlled by an anonymous attacker. After a period of deliberation, a majority of core developers, miners and other members of ethereum's community decided that the best path forward was to hard fork the network to "undo" the hack and return the stolen funds.

The community's power to revise ethereum's transaction history has surprised many outside observers who were told that blockchains are, as a rule, immutable.

To the broader market, the inner-workings of the deliberative process that led to this outcome are at best opaque. The decision proved controversial within the community as well, with a vocal minority taking the position that ethereum has betrayed its core principles and choosing instead to support the un-forked network, with the result being that there are now two blockchains that share ethereum as a common ancestor.

"The community" is often in the background of our conversations about ethereum. In any discussion of ethereum's ability to provide settlement finality, it's a necessary caveat: in two pieces from earlier this year, both Tim Swanson and Vitalik Buterin articulate that, ultimately, it is the community's economic consensus which determines which chain is legitimate. More broadly, any conversation about ethereum’s future potential relies on the implicit promise that there will continue to be a productive community of talented developers working to maintain and support the project.

But for the most part, the community is treated as a black box. We know it is important, we believe that it works, but we rarely look too deeply at what makes it so. When our community functions as we expect, we congratulate ourselves, as we did when we successfully hard forked into Homestead. When someone else's community struggles, as bitcoin has with the divisive block size debate, we point to it as a sign of inevitable moral failing.

There have already been suggestions for how the ethereum community could better manage future situations like the DAO hard fork. But too often these require creating formal rules or governance structures which are impractical in a decentralized community.

Rather, our solution should begin by looking at what works today, what doesn’t, and by finding practical ways to make incremental improvements.

This isn’t just an academic issue. The community wields tremendous power over its blockchain. Convincing the world to build its future on ethereum requires proving that our community will exercise that power in a responsible way. Even more, it requires proving that our community will continue to be effective and responsible as the platform scales into something far larger than it is today.

The community's role

The DAO hard fork is a useful practical illustration of how the community exercises power over its blockchain.

The ethereum community is the group of people, institutions, companies and other organizations that together support and maintain the ethereum blockchain. This includes the core developers who work on the ethereum protocol itself, the miners who own and operate the nodes that constitute the ethereum network, the larger ecosystem of developers and entrepreneurs who are building applications on the platform, researchers who make critical contributions to the development of the platform, ordinary token-holders or users of ethereum applications, and others.

In response to the DAO hack, core ethereum developers proposed a hard fork that would return the stolen funds. Essentially, the miners whose nodes constitute the ethereum network would all agree to adopt a new version of the ethereum software that would remove the offending transactions.

This change requires a "hard fork" because it breaks backwards compatibility – the entire network must agree on the state of the blockchain to continue.

However, a minority can reject the changes introduced by a hard fork and continue with their own chain – they have the power of "exit". This is what happened after the DAO hard fork – a minority of miners decided to continue on without accepting the changes, and became their own minority blockchain. In a narrow sense, the ethereum blockchain's immutability has not been compromised by the hard fork. The "original" chain, without any of the edits introduced by the hard fork, still exists in the form of ethereum classic.

However, the minority has no guarantee that the broader community will devote resources or attention to their blockchain. This is significant because the community gives ethereum part of its value: the expectation that, over time, the protocol will be upgraded and a large ecosystem of applications will be developed, increasing the utility of the platform. The ethereum community understands this intuitively, which is why a few days afterwards both sides of the fork were competing to tally up which companies, people or researchers were working on their preferred chain.

These nuances of blockchain immutability are not widely understood. Data you store on a blockchain – including tokens, or code – has a strong probability of remaining immutable. But preserving that immutability might require you to choose a minority chain, in which case you have no guarantee that your preferred chain will continue to attract the attention of the broader community. And if the value of your tokens or the utility of your code depends on that community, the minority chain may not be much use to you.

This extends beyond immutability. Hard forks are not typically changes to the history of transactions – more often, they are protocol upgrades or new features that change how the blockchain functions. For example, a change to increase the maximum block size in bitcoin. More generally then, we might say that you have a guarantee against any change that could be introduced through a hard fork only if you can accept being in the minority in some cases.

Forming a minority chain is not always possible. If I am the only person that wants to reject a hard fork, I could certainly operate the lone remaining node of the unchanged blockchain, but my chain would not be viable. In practice, a minority chain needs some minimum amount of support to attract a community of developers or convince an exchange to list its tokens. So, we need to add another caveat: you have a guarantee against changes introduced through hard forks only if you can form a sufficiently large minority to continue a viable chain.

(Lastly, it's worth noting that the parameters of hard forks might change significantly in the future, which would alter the dynamics I describe above).

Misconceptions

The community matters. Core developers have influence over which concrete proposals are brought to the community, and are trusted by miners to provide technical guidance. Miners have control over which hard forks are accepted by the majority of the network. A larger community of developers, companies and others determine which post-fork chain attracts the most talent and resources. The ability of any individual to reject a change introduced through a hard fork depends on convincing a viable minority of the community to come along with them.

None of these decisions are made in a vacuum. They require the community as a whole to be able to identify novel problems, surface relevant expertise, propose effective solutions and thoroughly consider the benefits and costs of those solutions. Ideological beliefs and financial incentives shape the decisions of all community members to different degrees. Disputes and personal conflicts can, if not resolved, damage the decision-making process and inhibit cooperation.

We can't separate the technical components of the ethereum blockchain from the human community that supports it. This isn’t just some nice sentiment. This is mission-critical wetware on which ethereum’s future depends. A community can be better or worse, cooperative or siloed, productive or toxic. A blockchain whose community loses key expertise and is unable to debate solutions without devolving into personal conflict may be a perfectly adequate piece of technology, but it is a terrible blockchain. What guarantee do we have that this will never happen to us?

Defining the community

Within the ethereum community, we often delude ourselves into thinking that blockchains are beyond these concerns. There is a tendency to believe that because the community is decentralized, it is immune to the challenges of other human organizations. Part of this is due to the lack of easy analogs: blockchains are not companies, they’re not governments and they’re not quite like other open-source projects either.

It’s difficult to point to a model for what our community ought to be. Blockchain communities are novel things with no easy analogs. But they are still made of people, and subject to the same flaws and strengths as any human organization. Even decentralized communities can consciously try and change or improve themselves. Members of the community are free to adopt shared norms, ethical standards, and processes that make the group as a whole more effective at achieving a shared goal.

The ethereum community’s capacity for critical self-analysis and improvement isn’t just a theoretical concern. So far, the community has functioned well enough. But will the same decision making processes used today be as effective when the community is 100 times as large? When the economic value at stake approaches the size of a small country? When the political and financial pressures on key community members are far greater?

Over the next few years, we will attempt to scale the platform. How will we scale the community to match if we don’t understand what makes it work today?

Inspiring confidence

Outside observers of blockchain communities often make a different mistake.

Those with backgrounds in finance or law often grok immediately that public blockchains depend on a community. But when they look at it, they see an opaque mass of pseudonymous techno-anarchists engaging in messy arguments on Reddit and twitter and dozens of chat rooms. They conclude that there is no way this community could serve as a foundation for a global value transfer platform.

This is where the issue of "the community" intersects with another common topic in the conversation around ethereum – whether, and how, public blockchains should be directly integrated into existing legal structures. If you believe that the community alone can never provide sufficient confidence, then the obvious conclusion is to try and use legal or regulatory tools we already understand to accomplish the same end. For example, by treating core developers and miners as fiduciaries.

This is wrong, too – or at least premature. It is generally true that people tend to overestimate the stability of regulated centralized institutions and underestimate what can be achieved by decentralized systems. It's probably too early to say that the decentralized community around ethereum could never convince the market that they are capable of maintaining the ethereum blockchain in the long-term.

For now, it’s an open question. But if advocates of public blockchains believe that the community shouldn’t be subject to onerous regulation, then the community needs to find other ways to provide assurances to the outside world.

Improving, decentralized

The ethereum community needs ways to improve itself over time, to adapt to new challenges and provide greater confidence in its decision-making processes as the platform grows.

Some people want to use very heavy tools to accomplish this. Either by trying to fit the ethereum community into existing legal and regulatory structures, as mentioned above, or by having the community adopt rigid governance systems of some kind that will constrain future decision making.

Ethereum's decentralized nature makes these solutions impractical. Using existing legal tools in individual jurisdictions are more likely to cause entrepreneurs to flee that jurisdiction than they are to strengthen confidence in the community. Trying to convince the community to adopt some type of hierarchical, formal governance structure is likewise difficult: it’s seen to compromise the decentralization of the platform, a key ideological value shared by large segments of the community. Maybe some version of these “hard” tools could work someday, but for now they're non-starters.

If decentralized communities like ethereum are environments where formal processes are weak, maybe we shouldn’t start there. Maybe the right way to approach decentralized community governance is to try and develop very strong shared social norms and standards of behaviour, enforced not through some central mechanism, but through rough social consensus.

Formal processes are not the only way to improve a community's governance. Communities can also differ by the norms of behaviour they freely choose to adopt. A norm is simply an informal rule shared by a community of people. While not strictly enforced, norms play an important role in shaping how any community behaves. This is commonly understood in other contexts. For instance, every successful startup knows that their culture – their shared norms – is critically important.

We can already observe norms developing within the ethereum community. For instance, it’s become common for anyone writing about specific blockchain projects to disclose whether they are invested in it, either to remove the appearance of a conflict of interest or to signal their commitment to the project (I own less than $2,000 worth of ETH). Our community has a strong norm in support of identifying and widely criticising anything that even smells like a scam.

The advantage of relying on informal rules like norms is that it lets us take the processes used today and make incremental improvements. Even though it may be messy to outside observers, the community does “work” and has proven itself capable of responding to threats to some extent.

We aren't going to redesign the community into a system of committees governed by a constitution (at least not anytime soon). But we can take the community we have and try and articulate basic improvements where they are needed, argue about them, and build social consensus around them.

A thorough analysis of the ethereum community is beyond the scope of this essay. But drawing on the events of the last few months, here are three general areas that might be worth considering in more detail:

1. Reducing information asymmetry through transparency and pro-active disclosure

Some members of the ethereum community have access to more information than others. Core ethereum developers who are well-connected in the community and involved in critical projects, for instance, have more knowledge, insight and access than the average token holder. This is an example of information asymmetry, a type of problem that motivates disclosure and transparency efforts in many other contexts. In public markets, for example, companies are required by law to provide necessary financial and other information to their shareholders.

We might ask a similar question: What level of transparency should the community expect from its key members? We can already observe a strong pro-transparency norm. Shortly after the DAO hack, for example, a transcript of a conversation between core community members was released that allowed the broader community an unfiltered view into the early moments of the decision making process that shaped the initial response.

But our approach to transparency and disclosure is inconsistent at best. Many industry observers need to understand the deliberative process that led to the DAO hard fork in order to predict how the community might act in similar future situations. The public resources available to them – mostly news articles and blog posts – are insufficient and incomplete. Larger institutions rely on personal contacts from within the community to explain what happened, and why. If we want the broader market to trust the community, there should be better public channels for communicating decisions and the processes that led to them.

Information asymmetry is related to another problem: real or perceived conflicts of interest. Those who have access to information by virtue of their position in the community could profit from that information through speculation. Relatedly, those with particular influence in the community could use that influence to support outcomes that benefit them financially.

During the DAO hard fork debate, there was a recurring allegation that Slock.it’s social ties to core ethereum developers motivated those developers to support the fork. Though this has been adamantly denied, the fact that it was a credible allegation at all damaged the legitimacy of the process.

Are there circumstances in which prominent community members should declare a conflict of interest and recuse themselves from the discussion? If so, what are they?

2. Community engagement

When important decisions are being made in the ethereum community, do we have an obligation to ensure that the furthest reaches of the community – say, passive token holders – are aware of what is going on and how it might affect them? Today, this might seem unnecessary – anyone who owns ETH probably does so because they are invested in this project and are already following the discussion to some extent. But it's not clear how engaged the wider community is in such issues – prior to the DAO hard fork, a coin-vote held to gauge support had a turnout of only 5%.

In the near future, this problem will grow. Eventually, we should hope that many people that own ETH or rely on the platform will not have to care about the internal politics at the centre of the community. But these people would still be materially affected by the community’s decisions. It would probably be easier for them to trust the platform as a whole if they had confidence that, if a big decision is at hand, they will be notified.

This isn’t a unique problem for blockchains. A similar situation exists for public companies, whose shareholders need to be notified of important decisions or votes that require their attention. In most jurisdictions, there are regulations that require corporations to notify their shareholders (and the public markets in general) of important votes, and an entire industry built on helping shareholders make decisions on how to vote.

We can imagine that an analogous system of notification and voting could be accessed through the wallets and exchanges that token-holder use to manage their blockchain assets. In the case of a situation like the DAO hard fork, this could give the community as a whole far better information about the preferences of token-holders.

3. Resolving conflict

Occasionally, disagreements will turn into disputes. These can become toxic and damaging to the community as a whole. We've already seen in the bitcoin block size debate how a bitter conflict between individual people can spill out into public and have a negative impact on the platform as a whole. During the DAO hack and its aftermath, personal attacks and other drama distracted and demoralized the community.

Ethereum developer Vlad Zamfir wrote on Twitter recently that the most important thing he learned from the DAO hard fork was the importance of good manners. This isn’t just some nice idea – this is an essential norm for a community that wants to retain and attract talent.

This is something that other open-source communities have learned the hard way. In 2014, Linus Torvalds said that the thing he most wishes he had done differently over the previous 23 years was treat people better:

"From a technical standpoint, no single decision has ever been that important... The problems tend to be around alienating users or developers and I'm pretty good at that. I use strong language. But again there's not a single instance I'd like to fix. There's a metric shitload of those."

Ethereum’s community prides itself on being collaborative and polite, a widely shared norm that is due in no small part to Vitalik's example. How do we ensure that it stays this way?

Conclusion

Talking about the community in these terms seems odd. Sometimes it feels like an overly serious argument between moderators of a niche online forum, and other times like a disconcertingly vague conversation about securities laws.

But this makes a kind of sense. On the one hand, this is an odd internet subculture made up of people with a shared geeky passion. On the other hand, it is a community that supports and ultimately controls what could become a tremendously important piece of global infrastructure. If that happens, understanding the dynamics of our quirky community might someday be as important to global commerce as understanding the internal politics of the Federal Reserve.

If ethereum succeeds, the community will have to grow and adapt over time. But because the community sits in this uneasy middle-ground, it’s hard to articulate how it could grow or adapt. Doing nothing and hoping for the best is a mistake. Doing too much – by suggesting formal, hierarchical governance – is a poor fit in a decentralized community.

An easier place to start is to realize that there’s a middle way: formal structures aren’t the only mechanism for improvement. We have to take the community as it is – the one that works now – and build on it, by adopting norms and behaviours where needed. It’s something we do already – but it’s time to start being more intentional about building a scalable community.