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Exclusive: Does Forking Mechanism Allow for a Better Blockchain Governance Model?

Exclusive interview with Nathan Kaiser: Part 1

Nathan Kaiser, Chairperson of the Cardano Foundation and a long-time lawyer in the technology sector, shares his views on the crypto regulatory issues in different jurisdictions and blockchain governance. In particular, Nathan examines whether the forking mechanism allows for better blockchain governance and the reason why “blockchain governance = community governance”.

What is holding the industry back from blockchain governance, and what are the solutions we need for off-chain governance?

Similar to the blockchain itself, blockchain governance, whether on-chain or off-chain, is yet to mature just as the industry itself. While it is premature, the blockchain governance needs time for more research as well as elements from the Game Theory, and, certainly, from the economy.

Technological innovation always comes first and it is especially true in tech and policy. Collateral damage is subsequent. Hence, we are at a very early stage of off-chain governance.

The voting mechanism is an essential element of on-chain governance on the blockchain. Can you compare simple majority coin-voting and identity-based quadratic voting on the blockchain? Are there any drawbacks to these two voting methods?

While it is too early to compare the models, every solution is a decision based on values. There are no correct or incorrect voting systems regardless if it is quadratic or identity-based voting. Decisions will always be based on values.

The selection of different voting systems is a choice in itself. Therefore, it is a reflection on your transparency on value judgments rather than justification of the choice you make between the systems.

In terms of forking, recently there are some blockchains such as Algorand and Conflux Chain claiming that there will be no hard forks in their blockchains. Do you agree that a blockchain without forking mechanism is a better governance model than blockchains that allow forks?

There may not be a huge difference, yet there is competitive pressure on all fronts. However, when you allow forking; subsequently, you cannot disallow it. For instance, Ethereum did not allow forking. Although Ethereum did not forbid forking, it did not take proactive measures to reject it. As a result, you will have competitive pressure — a healthy kind of evolutionary pressure to improve. Otherwise, the competition will create a fork that will directly compete with you.

For blockchains that actively disallow forking, such as Algorand and Conflux chain, it is a fair design decision. You are in direct competition with other chains that will be engaged in similar things. Hence, it needs to be viewed as a different way of dealing with competitive pressures and stress.

Nathan mentioned blockchain governance is community governance in the UNCHAIN Bitcoin & Blockchain Conference, Berlin.Source: UNCHAIN Bitcoin & Blockchain Conference

In Berlin, you mentioned “Blockchain governance = Community governance.” Can you share with us more about this idea?

Governance is always about people and they matter the most in all tech-related projects. When we deal with regulation and governance in blockchain, it is about the people involved, their interaction, decision-making, reactions and ways of sharing the information. The involved people include token investors, coders, founders, employees and those who invested their time and emotions. The most important key is ways of regulating the interactions of these people involved in the blockchain project.

ACCESS Becomes World’s First Organization to Deploy Blockchain Voting in Annual General Meeting

The Association of Cryptocurrency Enterprises and Start-ups, Singapore (ACCESS), a non-profit organization for the cryptocurrency and blockchain sector in Singapore, has set the ball rolling as the first institution across the globe to utilize blockchain technology for an Annual General Meeting (AGM).

As reported by HrmAsia on Jan. 13, ACCESS officially utilized blockchain for on-premise voting. This decision was reached as this technology will propel transparency in the voting process, eradicate double voting, and make members anonymous in vote casting.

Blockchain voting gets an upward trajectory

JEDTrade, an enterprise blockchain technology solutions provider that also doubles up as an ACCESS member, was tasked with developing the blockchain voting solution.

ACCESS chairman, Anson Zeall, noted, “We are seeing the future of corporate governance through the implementation of blockchain technology starting with our most important corporate governance event, our AGM.”

The blockchain voting was founded on the following procedures:

Members cast their votes for future agenda items and appointment holders on the blockchain-based on advantages rendered, such as traceability, transparency, and immutability.

Anonymity is granted by the detachment between members and their votes. This means a vote’s origin cannot be retracted.

A group of voting codes is randomly created, hashed, and stored in a Code Management Smart Contract. This process happens before physical copies being printed as QR codes. They are then randomly presented to members after registering at the AGM.

The Code Management Smart Contract is used in tracking every code status as this ensures that voters only vote once. Conversely, the voting smart contract follows and initiates votes. Additionally, it comprises the positions being contested by candidates.

By leveraging on blockchain technology, the hashed codes can be tracked, prompting efficiency in authenticating votes. Furthermore, voters are allowed to make their votes through generic machines comprising of a fixed blockchain address to the Voting Smart Contract.

Image via Shutterstock

How Blockchain Can Mitigate Electoral Malpractices

For elections to be credible, they ought to be free and fair. Nevertheless, the voting process may be marred with malpractices, and this hinders transparency. This has been an issue that has affected many electoral processes across the globe because the will of the people is, at times, jeopardized in favor of egocentric motives. For instance, it is allegedthat the 2016 US Presidential Elections between Hillary Clinton and Donald Trump were hacked to favor the latter.

Realistically, voter fraud has been wreaking havoc across the globe, and this has compromised efficiency. For instance, according to the Pew Center on states, 2.75 million Americans are registeredto vote in more than one state. Blockchain is being touted to avert electoral malpractices and voter fraud based on the distributed ledger technology (DLT) presented.

Blockchain offers anonymous voting

A vote ought to be considered as high-value data. As a result, it should be safeguarded in the best way possible. Moreover, voting should be anonymous, as voters should not show their political preferences or identity to the public. Information stored in a blockchain network is decentralized and encrypted, and this makes it ideal for electoral processes.

For instance, in October 2019, the Uruguay Digital Party deployedblockchain technology to revamp its internal voting process. It achieved this objective by partnering with Aeternity, a blockchain startup, as it wanted to make voting anonymous, transparent, and accessible.

The fact that blockchain systems are transparent and immutable or tamper-proof has been one of the stepping stones of making them favorable in voting processes. For example, Horizon State,a tech-firm, launched revolutionary decision-making and voting blockchain structure in the form of an incorruptible, anonymous, and secure digital ballot box.

Expressly, participants are expected to utilize decision tokens (HST) to make their votes from a PC or mobile phone that is logged into an immutable blockchain used in the verification of election outcomes. This approach eliminates any electoral malpractices, such as tampering, recording errors, or manipulations.

Blockchain eradicates hacked voting

Hackers, at times, take advantage of internet connectivity to launch attacks that comprise votes. This can prove to be detrimental as voter apathy may rise because people may become less concerned about elections.

In recent times, hackers have become crafty to the extent that they manipulate voter registration databases by removing voters perceived to support a particular candidate. In the process, they swing a closely contested election. For instance, in the 2016 US presidential election, Russian intelligence officers have been accused of breaching voter registration databases.

Hackers usually exploit vulnerabilities in tabulation systems and voting machinery to launch their attacks. In 2017, one of the biggest hacker conferences in the world dubbed DEF CON availed a voting machine village, and hackers were required to exploit and hunt cyber vulnerabilities in election office networks, voter registration databases, and voting machines.

The event organizers noted,“By the end of the conference, every piece of equipment in the Voting Village was effectively breached in some manner. Participants with little prior knowledge and only limited tools and resources were quite capable of undermining the confidentiality, integrity, and availability of these systems.”

A blockchain-enabled voting process can be instrumental in averting hackers as they will have to attack all nodes to gain entry, and this is nearly impossible. As a result, voter fraud is prevented based on blockchain’s notable characteristics, such as accountability, immutability, and transparency.

Blockchain-based voting taking shape

In 2018, West Virginia emerged as the first US state to permitblockchain-powered internet voting in primary elections. Blockchain was deployed because it offered a safe interface needed in eliminating voter fraud and boosting turnout. As a result, it enables citizens to cast their votes while abroad. Blockchain-based voting not only eliminates electoral malpractices but also allows people to vote irrespective of time and distance.

In October 2019, three Indian computer engineering students, from Malla Reddy Engineering College for Women, were involved in the creationof a blockchain-enabled voting platform that permitted votes to be cast online as compared to manual procedures of standing in a poll line. The students acknowledged that this initiative was prompted by their urge to propel democratic processes and eliminate voting challenges and fraud in urban areas.

The notion of blockchain having the capability of protecting personal data was echoed by Brittany Kaiser, the Cambridge Analytica scandal whistleblower, during an interviewat the World Economic Forum. She noted that personal data was one of the most valuable assets in the world, and blockchain could come in handy in addressing data protection issues. In elections, blockchain-powered systems ensure immutability and transparency in the voting process, and this eliminates challenges, such as electoral malpractices and voter fraud.

Image via Shutterstock

Ohio Democrat Lawmakers Propose Blockchain Voting in Bill For Election Overhaul

In the Ohio House of Representatives, Democrats have included a new voting system pilot based on blockchain as part of their elections law overhaul bill. The system will be used to count and track the votes of military personnel stationed outside of the US but registered to vote in Ohio.

On May 5, the Ohio Democrats introduced the elections overhaul bill which requests the set up of a pilot program for blockchain voting specifically for Ohio registered U.S military voters stationed overseas.

The bill was introduced by Democrat Reps. Beth Liston and Michele Lepore-Hagan with the signatures of 16 other Democrat party members.

While no technology vendor has been named as of yet, the proposal is explicit about the role that blockchain will play in the new system. Should the bill be passed, the votes of military personnel will be encrypted, transmitted and be protected and secured by blockchain technology.

A board of elections would be selected and then physically print the incoming military votes for counting. The selection of the election board responsible for the counting falls on the Ohio Secretary of State, Frank LaRose, as the bill reads, “The Secretary of of state shall select the boards of elections that shall participate in the pilot program.”

Potential US Congress Blockchain Government Voting Overhaul

Blockchain voting systems appear to be increasingly part of the US Government’s discussion on elections.

The Ohio Democrats’ proposed pilot for military members comes at a time when US Congress is also considering using blockchain technology to enable the Senate to conduct remote voting on national affairs during the ongoing COVID-19 pandemic.

According to a Senate staff memo, the Covid-19 pandemic has forced the shut down of many sectors of the society. As the two chambers of Congress have always met in person to conduct deliberation and vote, there is an expressed need to change the system to follow social distancing orders and to protect member voters.

Voting enabled by blockchain could allow the process to be conducted remotely while offering a high level of security. “Blockchain can provide a secure and transparent environment for transactions and a tamper-free electronic record of all the votes. It also reduces the risks of incorrect vote tallies,” read the memo.

Vladimir Putin’s Next Presidential Term Will Depend on Blockchain-Powered Constitutional Amendment Voting

Russia’s upcoming e-voting on Vladimir Putin’s Constitutional amendments will be implemented using blockchain technology.

Citizens in Moscow will be able to cast their votes online using blockchain-powered e-voting, according to the Moscow government’s official website. Starting on June 5, Moscow citizens can sign up for the upcoming voting scheduled from June 25 to June 30.

By implementing blockchain technology for the voting process, it ensures security and transparency and will help to anonymize and encrypt each vote which provides the immutability of the data.

The Russian voting blockchain network will not have a single server, which ensures that the chain is “almost impossible to hack.”

According to the announcement, “Such a network does not have a single server: in order to change the information regarding bulletins, it is necessary to obtain the approval of most network participants, so the chain is almost impossible to hack. The vote itself is anonymized and encrypted.”

The Constitutional amendments proposal aims to allow Putin to serve an additional two six-year terms, as introduced in January 2020. Putin has been serving in office in his posts as the prime minister or President since 1999, and if Russian voters vote against him, he will be leaving his post as President in 2024.

Changpeng Zhao (CZ), the CEO of Binance previously mentioned that the Russian President, Vladimir Putin, could be the most influential person in the crypto space.

Shortly after, China’s President Xi Jinping publicly endorsed blockchain. He mentioned that he believes that regulations have a significant impact on cryptocurrency adoption. “I strongly and fully believe that the more favorable they are to the blockchain industry, the better the country will develop this market and increase the likelihood of becoming the leaders of the financial world tomorrow.”

Russia sees surge in Bitcoin popularity

A recent study noted that Bitcoin trading and exchange volumes have been surging in the country’s local exchanges, amid the COVID-19 pandemic. With the lack of income due to self-isolation and business operations coming to a halt, analysts believe traders and new investors are looking at cryptocurrencies.

Could Blockchain be a Solution for Mail-In Voting Issues and Election Ballot Counting Fraud?

Amid the misinformation circulating in response to the US presidential elections, voter fraud has been a growing hot topic. With digital innovation on the rise, many have pondered the question of whether the time has come to trade in paper ballots and mail-in votes for a more efficient system powered by blockchain technology.

USPS files for blockchain patent to power US voting

The USPS postal office had already previously submitted a patent requesting a blockchain-powered voting system, as it would be beneficial for security purposes and increase efficiency in multiple aspects. Though everything seems to point towards the use of blockchain for voting as an eventuality, the danger may be that with ballots becoming digital and running on a blockchain, this may expose them to potential hacks.

With blockchain technology, a definite winner is that it will enable the transition from paper ballots to digital votes. This will prevent a loss of votes that may potentially occur during the mailing process, and eliminate human counting error, as everything will be encrypted and recorded on a blockchain.

With a digital voting system, the number of voters may also increase with access to voting facilitated by the option of doing it digitally. This may be increase efficiency and make the whole experience more effortless, especially during the pandemic. This past US election is proof that a transition to an online voting system may be beneficial, as a record number of voters have participated in determining the outcome of the presidential race. Introducing a blockchain-powered voting system may additionally serve to onboard more voters, as voting would be made available to anyone with access to an internet browser or a mobile phone.

A blockchain voting system could guarantee that ballots are not lost, that all votes are accounted for, and recorded on a distributed ledger technology. It will also redirect the power of centralized authorities towards decentralized ledger systems. Also, the results of the elections would be made known instantaneously, something that has been a problem this election.

Blockchain could benefit politics, but there is still work to be done

For the advantages of blockchain technology to be leveraged in full, however, votes must be recorded on the chain, as opposed to just using it to record the number of votes.

Cryptography experts such as Ethereum’s co-founder Vitalik Buterin and Binance’s Changpeng Zhao (CZ) have also vouched for blockchain-powered voting systems. On the matter, CZ said:

“If there is a blockchain based mobile voting App (with proper KYC of course), we won’t have to wait for results, or have any questions on its validity. Privacy can be protected using a number of encryption mechanisms.”

However, there may be a few steps to implement before a blockchain-based system could come into play. Vitalik Buterin said:

“The technical challenges with making a secure cryptographic voting system are significant (and often underestimated), but IMO this is directionally 100% correct.”

With a blockchain-powered system, this may also eliminate censorship that has come with political posts circulating on Twitter, Facebook, and other social media platforms, since everything will be recorded on nodes running on the chain.

What are the cons of using blockchain technology for votes?

The downside of digital voting may be that with technology, this may potentially attract hackers seeking to manipulate the votes. Though blockchain-based systems are known to be pretty robust, cryptography would have to be on par to secure electronic ballots.

It has previously happened that loopholes and weak areas of blockchain-based voting systems have been exploited in targeted attacks. In Russia, its digital voting network was attacked. A report had also unveiled that votes could be decrypted by retrieving keys through the HTML code of the electronic ballot.

Why Blockchain Voting Is Fundamentally Important for Democracy and Trust

Blockchain’s unique tamper-proof feature can simplify the voting process and remove reliance on trusted third parties through shared consensus, thus reducing costs in voting and disputes between both parties.

Trust is missing

Although Associated Press and other media have announced the 2020 US election results, disputes about the Trump and Biden election seem far from being settled.

Without substantial evidence, Trump’s recent tweets are almost alike conspiracies surrounding mail-in ballots, rigged election, and vote recount. Unverified claims remain and have been shared widely.

What’s behind the chaos is a lack of trust in authoritative institutions like media companies, voting institutions, and even judicial courts. When authorities in power are not trustworthy, enter blockchain.

Why blockchain can be a consensus for both parties

These authoritative institutions are “trusted third parties”, a term used in Bitcoin’s whitepaper that describes trust intermediary.

We can see the drawbacks of trusted third parties – we have to delegate our rights and rely on them to do the right thing and follow established laws and regulations. But those in power also have the incentives to benefit themselves which could undermine the interests of the general public.

Blockchain, as the underlying technology of Bitcoin, has a unique feature: it is tamper-proof which is primarily guaranteed by a combination of a distributed system, consensus, and encryption. When you write something on the blockchain, you can never modify and delete it. This is the first time humankind can hold such ability with technology.

When it comes to the blockchain voting system, the Democratic Party and the Republican Party can make a joint effort to create a blockchain system, which can then be used in other elections as well. This way, we transform our trust in institutions and people involved in the voting process, and transfer it to blockchain-powered trusted machines, with its tamper-proof feature proven by mathematics.

How blockchain could change voting

Blockchain can reshape the whole voting process.

It simplifies the voting process. With blockchain, you don’t need to go to the voting station or mail-in ballots. Instead, you can vote on your phone. As this is more convenient, it encourages more inclusivity of voting people. It removes mail-in ballot deadline problems and any questions of rigged operations around USPS.

It removes doubts on voter fraud. The presidential election result has stirred doubt and uncertainty among many, including celebrities. For instance, John McAfee hints at election fraud from a Spanish prison, tweeting, “Government bureaucrats can store documents, modify them, erase them, or, if it suits them, create them out of thin air. Do not forget that votes are documents.”

With blockchain, fraudulent claims that dead people voted in the election can be settled once and for all as well. Unless you know the passwords of the phone and blockchain voting app, and vote through them, the argument that dead people voted is refuted – dead people cannot vote.

Blockchain may remove reliance on voting systems like Dominion. There is a rumor that through Dominion, 2.7 million votes were deleted and hackers modified the result. With the blockchain voting system, there is no way of deleting any votes and its network is much harder to hack than centralized voting systems.

Profund impact of blockchain voting

The transparency and fairness of the presidential election is the backbone of democracy. A blockchain-based voting system can guarantee transparency and fairness and thus reduce the huge costs involved in the voting process and voting disputes. It can help enhance democracy and rebuild trust.

Blockchain voting can be extended to other elections. Furthermore, with blockchain’s tamper-proof and transparency features, it can be used by other government services. It is a process of reducing government roles. With the widespread adoption of blockchain technology, a blockchain-empowered society may be emerging where we reduce our reliance on trusted institutions and centralized powers in charge.

Mogul Productions Implements Chainlink Oracles to Optimize Film Financing

Some industries are reluctant to change because they benefit a small group of people or firms; film financing fits this category. Mainly restricted to established companies, funding and producing an independent movie can be extremely challenging without the right backers. One project looking to remedy that is Mogul Productions, a blockchain-based, decentralized film financing platform.

As Mogul prepares for its v1 mainnet launch, it has announced a new partnership with Chainlink, the largest decentralized oracle in the space. This collaboration will allow the introduction of vetted off-chain data into Mogul’s smart contracts, creating an ecosystem that accurately measures film and production costs, where contributor profits can be efficiently, transparently, and traceably distributed. This new platform and the integration of real world data will enable every day investors, speculators, producers, distributors, and movie buffs to gain investment opportunities, oversight, and voting rights in a previously inaccessible industry.

Chainlink Is the Bridge Allowing for Democratized Film Financing

A platform that brings more equality of opportunity to the film financing industry is a massive innovation. However, it is of little value without the ability to interact with the outside world. Mogul will allow for the allocation of funds by users to new cinematic projects, but the entire film production and distribution process takes place outside the blockchain realm, creating the necessity for an intermediary. Chainlink will serve as this third party, integrating movie budget and profitability data to guarantee initial contributors receive fair market dividends.

Given the innumerable transactions across different sectors and companies that go into film production, Mogul is introducing a Collection Account Manager (CAM) to provide third party assurance. This independent auditor will analyze every transaction and data entry, providing transparency to film financiers. The CAM’s primary responsibilities will be overseeing all costs, revenues, and profits for each independent film project.

Implementing a CAM into Mogul’s operations can bring an additional layer of security and reliability, but there still needs to be a way to make sure the CAM’s data reaches Mogul’s smart contracts. Chainlink is providing this service, creating the ability for the CAM’s financial information to be reliability transmitted across platforms.

Chainlink is a multi-billion dollar project that has implemented decentralized oracle services across a plethora of applications, making it the perfect partner for this endeavor. Beyond off-chain financial data, Chainlink will also be relaying a USDC/ETH price feed used to compensate contributors. Users will make all contributions in ETH, but film production and distribution transactions use US dollars, so this price feed is necessary to calculate accurate payouts.

Cinematic Experts Plot a Bright Future for Mogul

Mogul’s team contains some of the most recognizable names in the movie industry, including Academy Award, Emmy, and Golden Globes nominees and winners. Combined, the Mogul team has created over 225 hours of scripted film content, produced more than 95 feature-length films, and generated over $425 million in box office revenues. Utilizing blockchain technology, this team of industry insiders has plans to flip film financing on its head, and thanks to the partnership with Chainlink, they are one step closer to realizing this ambitious goal.

Image source: Mogul Productions Media

Indian State Eyes Blockchain Technology to Facilitate Remote Voting

The government of Telangana, a southern Indian state, is moving forward with its objective of making the voting process seamless and trustworthy with the help of blockchain technology.

Boosting remote voting

Telangana has set its eyes on enhancing remote voting amid the coronavirus pandemic. Furthermore, this approach will be helpful to senior citizens who may be unable to go out to vote.

The state’s IT department is hopeful that it will attain all the necessary clearance needed to deploy blockchain technology for an election. A top official noted:

“We are confident of getting the required approvals, permissions, and amendments at some point in time in the future.”

In collaboration with the Information Technology Electronics and Communications (ITEC) department, the Telangana State Election Commission had projected to test the blockchain-powered remote voting platform in the December 2020 GHMC elections but faced some challenges.

The official acknowledged:

“The elections took place in the backdrop of the pandemic. It was precarious for the elderly to go out and vote. Yet we could not use the technology because for this to happen, the Municipal Act needs to be amended.”

Counting on blockchain’s tamper-proof feature

A blockchain-based voting system also guarantees transparency and fairness, hence reduces the huge costs involved in the voting process and voting disputes. As a result, it can help enhance democracy and rebuild trust.

In other news, India’s cryptocurrency ban recently resurfaced after a senior official confirmed ongoing talks about a bill criminalizing investments in the booming asset class. The bill will particularly penalize digital currency miners and traders and may look to implement a 2019 recommendation of a 10-year jail term.

Algorand Initiates Voting for Expanded Governance and NFT Rewards Programs

Key Takeaways

Algorand Foundation opened voting for its Period 8 governance measures from September 1 to September 15, 2023.
The foundation aims to auto-renew the xGov Grants Program and increase allocation for the NFT Rewards Program.
Total stake voted so far stands at 575.7 million Algo, with 7.8K governors participating.
The native token $ALGO has seen a sharp decline from $3 in 2021 to its current price of $0.094.

Governance Measures in Focus

The Algorand Foundation has entered the voting phase for Period 8, Session 1, focusing on initiatives including the xGov Grants Program and the NFT Rewards Program. The voting window is open from September 1, 2023, until September 15, 2023, and has already seen 575.7 million Algo staked and 7.8K governors participating.

The core of the voting session is aimed at auto-renewal mechanisms for the xGov grants and an increased allocation for the NFT rewards scheme. Preliminary results show strong approval from the Algorand community.

Although the Algorand Foundation is working to expand its ecosystem and add more functions, its native token, $ALGO, has plummeted from $3 in 2021 to just $0.094.

xGov Grants Program: Piloting for Sustainability

The xGov Grants Program is in its pilot phase, and 26 projects have submitted proposals for grants amounting to around 5 million Algo. The community aims to refine the xGov Minimum Viable Product (MVP) to better filter and select impactful projects. This voting session also includes a measure that seeks to “automatically top up the xGov grant allocations by tapping into the quarterly governance rewards available.”

If approved, the top-up mechanism will activate when the remaining grant funds drop below 1 million Algo, ensuring continuity. Currently, the measure has gained 76.68% approval, according to the foundation’s data.

NFT Rewards Program: Measuring Success and Proposing Expansion

The NFT Rewards Program initially allocated 500K Algo to boost Algorand’s NFT community. Since its launch in late July to early August 2023, the program has seen significant results. For instance, Rand Gallery experienced a 4X jump in transaction volume within the first week of the program. Another platform, Shuffl, saw a notable increase in listings and user engagement, while Algogems doubled its monthly volume to 33K by mid-August.

The current voting session proposes to extend the NFT rewards program and increase the allocation from 500K to 1 million Algo. However, this measure has so far received less favor, with only 42.23% approval, according to current data.

Future Outlook

These governance measures provide an outlook into how the Algorand Foundation is seeking to sustainably manage the grant allocation and strategically incentivize its growing NFT ecosystem. The decisions made during this voting session will play a critical role in shaping the Algorand community’s initiatives for the upcoming fourth quarter of 2023.