Recently the topic of voting and control has been discussed by multiple blockchain projects.
EOS, Ethereum, Bitcoin, and others all agree that blockchains must be controlled by voting, but who should do the voting?
Token Holders
This model adopted by EOS is straight forward and creates 100% alignment and accountability for the voters and voting outcomes respectively; this is the most successful and widely used voting model throughout the world today, in and out of technology.
By combining a Constitution with Token Holder Voting, EOS defines the scope of the miners to a degree that manages everyone’s expectations equally and restores control of the network to those affected by the decision making.
Not the Token Holders
If you don’t allow token holders to vote, it means someone else is voting for them.
This model splits the beneficiaries and the decision makers and results in outcomes that may not be in the best interest of the token holders. This structure is analogous to U.K. citizens voting on behalf of US citizens for government; a connection can be argued, but they are not the direct beneficiaries of the outcome. This is how both Bitcoin and Ethereum are structured today.
Proof of work voting has shown to quickly centralize; both hardware and electricity are cheaper in bulk which results in controlling mining pools; this creates an oligarchy that has little to no accountability for their actions and are not directly affected by their decisions.
The following examples have taught us the dangers of having others vote on our behalf:
Bitcoin Scaling — From 2015–2017 block producers refused to increase the block size limited while the network was at capacity, so that higher transaction fees could be charged.
Ethereum and The DAO — Dominant mining pools isolated the information and decision making to a few. The lack of transparency or public framework for making such decisions gave inequitable trading opportunities to decision makers with little to no exposure to ramifications of their decisions; this taught us that code was not law, but the pool operators/voters were.
Taxation without Representation — in the 1750’s the British government began taxing American colonies without allowing them to vote in parliament. This ultimately led to the American revolution and the creation of the U.S.A.
Voting Cartels
All Blockchains are susceptible to large influencers, regardless of the voting model. Token Holder voting models however are far more resilient than Miner/Non Token Holder Voting Models.
Token Holder Voting subjects the Cartels to the outcome of the vote. Their tokens are also affected by the perceived healthiness of the network due to the size of their stake.
In models where voting power is given to other parties, Cartels become unable to be impeded and quickly consume the decision making of the network in such a way that does not hold them accountable for, or affect them by their decisions; Bitcoin and Ethereum have shown this unintended outcome.
Healthy Debate
We encourage an open healthy debate on this issue and will continue to leverage good ideas from the ecosystem no matter where they come from.