What is Cryptocurrency Governance?

There are a lot of issues related to cryptocurrency governance. It does not have laws or institutions of law that act as a backup to ensure that the rules in the system are complied with. However, it is based on agreement from within the community. The achievement of this agreement may not be easy. For example, the Bitcoin community has witnessed several debates, such as the block size debate and transaction rate. Later, in 2017, a severe conflict resulted in the creation of an entirely new separate version – the “hard fork.” This split gave rise to yet another currency with the same name as Bitcoin Cash.

Equally, in 2016, the smart contract containing Ethereum’s DAO experienced a vulnerability that led to theDAO hack. This hack resulted in a massive revenue loss of millions of dollars. To handle this, the Ethereum community is divided into two networks: ETH: Ethereum, and ETC: Ethereum Classic. These cases show that governance can potentially influence the future and, hence, the value proposition of a cryptocurrency.