The top-down centralized hierarchies that make up most governments are slow to evolve and inherently inflexible. They rely on coercion and are prone to significant risks such as corruption, lack of transparency, and unequal distribution of power. Thus, this centralization of authority and power proves to be the single point of failure for the state. 

The State as a Single Point of Failure (SPOF)

Centralized authority in a hierarchical organization that when compromised, negatively affects the whole system.

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- Centralization and Scalability 
- The State as a Single Point of Failure (SPOF)
- Distribution and Trust
- Power of Individuals 
- National Transition to Blockchain
- Globalization of Government Services
- Direct Democracy
- Decentralized Society
- New Social Contract 
- Individual Government Responsibility 


Principles of Blockchain Governance


Atzori, M. (2015). Blockchain technology and decentralized governance: Is the state still necessary?. Available at SSRN 2709713. https://doi.org/10.2139/ssrn.2709713

Blockchain Technology and Decentralized Governance: Is the State Still Necessary?

Historically, governments have been solutions for scalability, specifically to allow mass consensus and coordination between large groups of people. On the blockchain, mass consensus and coordination between large groups of people can be easily achieved through voting and user interaction. 


Centralization and Scalability in Blockchain Governance

Single Point of Failure (SPOF)

The blockchain allows citizens to reach consensus and coordination globally through cryptography. This is achieved through verified peer-to-peer procedures that do not require the use of a third party. Trust is then placed in the open ledger all can access rather than institutions. 


Distribution and Trust in Blockchain Governance

Unlike the state that uses coercion to maintain power, blockchain governance does not require the use of force. Services are able to be offered in more efficient and decentralized ways through a more horizontal and distributed diffusion of authority. This allows those who participate to become the source of legitimacy. 


Power of Individuals in Blockchain Governance

The blockchain allows a more personalized and granular government. The ledger can be used as a permanent public record repository that stores legal documents, Identification cards, land deeds, and other important documents. This transition would allow the creation of a government that would be tailored to the people rather than the "one-size-fits-all for the greater good" approach many governments use today.


National Transition to Blockchain in Blockchain Governance

Location-based government in our increasingly mobile world is a burden that forces people to comply with multiple governments. The blockchain would allow government services to become globalized and potentially borderless. 

Globalization of Government Services in Blockchain Governance

Citizens have direct participation in decision-making processes and governance. New models of participation would be fostered.


Direct Democracy in Blockchain Governance

Blockchain governance would not dismiss the state but rather promote good governance through the decentralization of power. This, in turn, would allow new legal frameworks that would become more granular and personalized to particular situations. 

Decentralization of Society in Blockchain Governance


Rather than rely on centralized institutions, blockchain governance would rely on social contracts based on consensus rather than coercion. This social contract would include decentralized arbitration systems that could solve problems through smart contracts made up of rules created by participants. 


New Social Contract  in Blockchain Governance

Blockchain governance would force individuals and societies to think of government in a less centralized way. Governance would become a personal responsibility rather than something that is imposed externally by a centralized institution. 

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