Often not considered as “sexy” in the blockchain world, but building effective governance is probably one of the most important tasks in building a resilient blockchain ecosystem. For this podcast we were very privileged to have James Carlyle, Head of Network and Operations at R3.

 

What is blockchain?

Blockchain is a distributed ledger system that makes a fundamental promise which is “what I see, is what you see”. The idea being that although people share a common view, they actually have their own copies of data and that matter for numerous reasons such as the one of control. . It means with a copy of their own data and the promise that what they see is what the other side sees, that they don't need to rely on intermediaries.

 

What is governance?

I always say if you haven't figured out who is in control, it's because you haven't been looking hard enough; there is someone there

Governance is about control first and foremost. What had initially attracted James to Ethereum was the idea of an unstoppable world computer where no one was in control. The initial bitcoin and Ethereum community were people who believed in small government or not government and perhaps they thought that these systems came without control. However James view is “I always say if you haven't figured out who is in control, it's because you haven't been looking hard enough; there is someone there”.

 

R3’s initial governance for running a consortium

In R3’s early days it was solely focused on running a consortium and the consortium was there to explore how blockchain technology could be used in finance. Right from the start R3 set out to encourage participation and collaboration, which is absolutely fundamental for blockchain, and thus governance became important from the very start.

In its early days R3 had a steering committee that decided what it should focus on. A steering committee had representation from every one of the 42 initial bank members of R3. One of the first things the steering committee decided to do was for example to set up an architecture working group and the architecture working group had its own governance.

The architecture working group’s governance was comprised of leading and chief architects from banks thinking about the right technology choice for distributed ledger's in banking. But governance has always mattered with these collaborative and heterogenous groups.

 

The Corda Network

When Corda was first designed its founder imagined a platform in which people could use Corda to manage agreements with each other for any business between any businesses and at any time… ie. the corda network. This can be thought of as an internet of Corda nodes. Corda nodes that are connected together and across which business transactions can take place.

In the initial days of Corda most groups of banks and other companies wanted to deploy their blockchain software together in the form of many consortiums who weren’t necessarily connected. Corda’s original vision of a corda network couldn’t be achieved in this manner. The reason is because each network per application has its own boundary of trust and that means that what happens in that network is trusted within the network itself, but it isn't trusted by anyone else. Each network has a “trust route” where all of the digital signatures and so on can be traced back and it's not possible easily at least to bring the advantages of blockchain across the boundary of one network to another.

That's because the provenance for example which is supported by things like the digital signatures and the hash chains and everything else, that provenance doesn't move across boundaries very easily.