Research Guide for On-Chain Governance of Blockchains

Glossary

Term Definitions Blockchain A distributed ledger that uses cryptographically linked blocks to record transactions. Blockchain A data structure in a blockchain that contains a set of transactions and other data. Distributed Ledger A database that is shared and synchronized between multiple nodes. Chaincode Program code deployed on a blockchain network that is used to execute and verify transactions. Smart Contract A computer program that automatically executes the terms of a contract, stored on a blockchain. Governance Policy specifies the rules and protocols by which a blockchain network operates. Consensus The process by which nodes in a blockchain network reach agreement on the validity of a transaction. Endorsement The act of approving and signing a transaction by a specific node in a blockchain network. Genesis Block The first block in a blockchain that contains the initial information. Node A participant in a blockchain network that can be a client, peer node, or orderer. Peer Node A node that maintains a complete copy of the blockchain and participates in transaction validation. Orderer Node A node responsible for ordering transactions and packaging them into blocks. Recursive Data Structure A data structure in which each node can contain references to other nodes of the same type. Signature Policy Rules that define which entities are required to sign transactions or changes to governance policies. Trust Rating An assessment of the reliability and security of a blockchain network. Short Answer Questions

What is blockchain and how is it different from traditional databases?

Blockchain is a distributed ledger technology that uses cryptographically linked blocks to record transactions. Unlike traditional databases, blockchain is decentralized, meaning no single entity controls the data. This makes blockchain more secure, transparent, and tamper-proof.

What is on-chain governance and how does it differ from off-chain governance?

On-chain governance refers to the encoding of a blockchain network’s governance policies into the blockchain itself. Off-chain governance, on the other hand, relies on social structures and agreements external to the network. On-chain governance provides greater transparency, security, and auditability.

Explain the concept of “consensus” in blockchain networks.

Consensus refers to the process by which nodes in a blockchain network reach agreement on the validity of a transaction. This ensures that all nodes maintain the same version of the blockchain and prevents fraud such as double spending.

What is “endorsement” of blockchain transactions and why is it important?

Endorsement refers to the act of a specific node in a blockchain network approving and signing a transaction. Endorsement acts as an additional layer of verification of transaction validity and helps ensure that only authorized entities can modify blockchain data.

Describe the role of the “Genesis Block” in a blockchain network.

The genesis block is the first block in a blockchain and contains initial information, such as network rules and parameters. It serves as the basis for all subsequent blocks and is a key part of the blockchain's immutability.

Distinguish between "peer nodes" and "ordering nodes" in a blockchain network.

Peer nodes maintain a complete copy of the blockchain and participate in transaction validation. Ordering nodes are responsible for sorting transactions and packaging them into blocks.

Explain how recursive data structures can be used to store signature policy information.

Recursive data structures, such as trees, can efficiently represent signature policies. Each node in the tree can represent an entity or a group of entities, and the links between nodes can define signature requirements.

How does on-chain governance improve the transparency and auditability of blockchain networks?

By storing governance policies on the blockchain, they can be easily accessed and verified by all network participants. In addition, any changes to the governance policies will be permanently recorded in the blockchain, creating a clear audit trail.

Discuss some factors that should be considered when evaluating the trust rating of a blockchain network.

Some factors include network location diversity, strictness of governance rules, security of member peer node deployment, verification of organizational identity, chaincode deployment rules, and the number of members in the blockchain network.

How can on-chain governance help mitigate the challenges associated with traditional off-chain governance methods?

On-chain governance addresses the challenges of off-chain governance, such as lack of transparency, slow decision-making, and potential disputes, by automating the decision-making process, reducing the need for trusted third parties, and providing a tamper-proof record of governance policies.

Paper Title

Analyze the pros and cons of on-chain governance vs. off-chain governance approaches. Discuss the applicable scenarios for each approach.

Explore different approaches to implement on-chain governance in blockchain networks using smart contracts. Provide specific examples and analyze their trade-offs.

Assess the impact of on-chain governance on the security and reliability of blockchain networks. Discuss potential vulnerabilities and mitigation strategies.

Investigate emerging trends and use cases of on-chain governance in different industries. Analyze the impact of different governance models.

Critically evaluate the challenges and opportunities associated with on-chain governance. Discuss future research directions and potential improvements.