On the Governance of Public Blockchains
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On the Governance of Public Blockchains
BTC is also a public blockchain, but it doesn't have so-called governance issues.
Navigating Web3 tides with focused insightsAuthor: Liu Jiaolian
During a community chain project meeting over the weekend, I shared some thoughts on public chain governance issues.
First, let's discuss why so-called public chain governance problems arise in the first place.
BTC is also a public chain, yet it doesn't have the so-called governance issues. Why? Because BTC has no governance—no governance at least in the sense people usually mean, such as on-chain voting mechanisms.
It's generally believed that within the entire BTC ecosystem, three forces interact, balance, and constrain each other. These three forces are: the maintainers who control modifications to the client code; the miners who possess the power to produce blocks; and the holders who own BTC and can vote with their feet.
If the code maintainers merge and release rule changes without broad consensus, they face resistance from miners refusing to adopt the new software version. In severe cases, token holders may dump their holdings and abandon the project altogether, effectively vetoing the change. Besides resistance and exit, miners and holders can choose to support alternative software versions released by other maintainers, thus driving certain maintainer teams and their products out of the market.
If miners violate consensus and attempt to seize control over the code, they will face unified opposition and condemnation from both developer communities and token holders. Developers and holders can abandon the chain hijacked by a minority of miners and continue running the original chain that aligns with community consensus. However, the Dark Forest principle reminds us this only works when the attacking miners’ total hash power is less than that supporting the original chain; otherwise, the usurping miners could use overwhelming computational power to attack and ultimately destroy the original chain.
This illustrates the dialectical relationship between the "gun barrel" and the "pen barrel." The gun barrel represents material force and plays a decisive role. But who commands the gun barrel? The pen barrel. The pen barrel isn’t merely a passive executor of code—it actively shapes community consensus. Therefore, all struggles are fundamentally ideological struggles. How does the pen barrel command the gun barrel? The key lies in the pen barrel representing popular will, embodying the broadest consensus, and standing for the ideals of the vast majority of the community people.
Who exactly are the "people of the community"? Are they just token holders? Not entirely. Token holders who support BTC are part of the people; those who hold BTC but oppose it are traitors, internal enemies, and targets of struggle; non-holders who support BTC are allies, part of the united front; non-holders who oppose BTC are adversaries, competitors.
Different technical visions among the people can coexist as long as everyone supports BTC—these are internal contradictions within the people, resolvable through discussion and compromise. But if someone acts with the intent to undermine or overthrow BTC, they become an object of determined struggle and dictatorship. Such objects must be firmly suppressed, deprived of freedom of speech, and expelled from the community. To put it plainly, the constitution protects only the rights of the people—traitors have no right to enjoy the privileges reserved for the people.
Thus, clearly, any ideology will inevitably exclude those who do not认同 or oppose it. The most important task of the pen barrel is to figure out how to unite the broadest possible base, win their support, maximize the number of people in the community, and thereby gain maximum strength.
Internet platforms combine both the pen barrel and the gun barrel into one entity, forcing users into a binary choice between enduring or angrily leaving. Satoshi Nakamoto ingeniously separated network operation from code development, allowing them to check and balance each other. More importantly, this design prevents either side from achieving monopoly: open-source code allows anyone to fork and establish new repositories, enabling broader consensus to emerge; anonymous, permissionless entry and exit from the mining network, combined with PoW’s randomness in block production, make it difficult for anyone to monopolize node operations or blockchain generation.
However, when we turn to non-PoW public chains, it becomes difficult to directly apply BTC’s governance-free model.
To be blunt, PoW is the only solution to the Byzantine problem. Once we remove PoW, we must introduce certain governance mechanisms to compensate for the security gaps left behind.
For example, Jouleverse uses PoA (Proof-of-Authority), which requires rigorous verification of validator nodes' authenticity and independence to prevent classic Sybil attacks.
Such qualification checks necessarily raise the barrier to entry and cannot achieve the fully permissionless access offered by PoW. Still, to preserve as much decentralization as possible, these thresholds should be set as low as feasible—but never so low as to compromise minimum security requirements.
Whether such a chain still qualifies as a public chain is purely a matter of definition. I don't wish to engage in abstract semantic debates here—they’re largely meaningless.
Back to substance. Another issue is incentives. PoW not only ensures extremely low, permissionless entry barriers (the only requirements being money to buy hardware and minimal technical skills) but also automatically distributes BTC rewards to miners. PoA lacks this built-in incentive mechanism, so governance must step in to periodically assess contributions, tally results, and distribute rewards.
In a way, corporate management revolves around evaluation, measurement, and incentive distribution. Translating this function into a blockchain context becomes a new challenge.
Copying traditional corporate models risks centralization—wherever there is centralization, corruption and failure follow, leading to single points of failure. Going fully decentralized and relying solely on community initiative leads to extremely low efficiency, losing timeliness entirely and falling far short of PoW’s real-time incentive structure.
Many successful blockchain projects have adopted hybrid models combining companies (as funding and management entities) with DAOs (token holder communities), such as Uniswap and Aave. Even Ethereum, whose main driving force—the Ethereum Foundation—is essentially a centralized company in nature. But for public chain projects requiring higher degrees of decentralization, such models may not be suitable.
Perhaps what's needed is a combination of decentralized top-level governance with organizational management principles borrowed from corporations. For instance, establishing a board at the top level—but unlike in traditional companies where influence is proportional to investment or shareholding, this board would be elected by the community. Beneath the board, starting from a CEO and executives appointed by the board, standard corporate management practices could still be used: defined roles, performance evaluations, incentive structures—after all, this framework is easily understood by most modern professionals trained in corporate environments, avoiding confusion about identity, responsibilities, and expected outcomes.
We might call such an on-chain entity a DAO or something else. But practice always precedes theory. Governance models suited for blockchain are still being explored—an arduous journey lies ahead.
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