Blockchain and Governance Structure

Introduction To Blockchain

The features of blockchain, such as transparency and immutability with decentralization, to create and implement an open governance structure. As a result, organisations are being driven to innovate in all facets of their operations. (Zheng, Z et al., 2018) Therefore, having a headquarters or CEO is not required, and development may instead depend on a worldwide distributed network of programmers who build the software protocol, giving birth to the concept of a DAO (decentralized autonomous system). Dash introduced the concept of blockchain governance first.

The term “blockchain” refers to both a data structure that (Atzori, 2017; Tasca & Tessone, 2017) stores transactional information and ensures security, transparency, and decentralization as well as a chain of records maintained in the form of blocks that are managed by several parties. Anyone with a computer and an internet connection may access a blockchain, which is a distributed ledger. It is very difficult to update or modify information after it has been recorded in the form of a block on a blockchain.

A digital signature that verifies the legitimacy of each transaction protects it. Once a block is formed, the data saved on the blockchain can’t be changed and is anonymous, thanks to the use of encryption and digital signatures (De Filippi et al., 2018). Consensus, often known as universal agreement, is made possible by blockchain technology. Every piece of information saved on a blockchain is digitally preserved, and each network member has access to a database containing the whole history of the data. The likelihood of fraud or cybercrime is decreased in this manner. It is thus more trustworthy and safer than any other method of transaction.

To better understand blockchain technology, A broad alternative that you may typically utilize can be a bank or through a payment transfer application like PayPal, Paytm, or UPI. Let's take an example where Rahul is seeking a way to send some money to his friend Rohan who lives in a different area (Andoni Merlinda et al., 2019). An additional sum of your money is taken out as a transfer charge since this option uses third parties to handle the transaction. Additionally, in situations like these, you cannot guarantee the security of your money since there is a significant chance that a hacker may interrupt the network and take your money. The client loses out in both situations. Blockchain can help with this.

If we utilize a blockchain in such situations, the procedure is significantly simpler and more secure than utilizing a bank (a third party) for money transfers (Jairam Shiva et. al., 2021). As the tax is handled directly by you, there is no additional cost because a third party is not required. In addition, the blockchain database is decentralized and not confined to a single place, making all the data and records maintained public and decentralized. There is less risk of hacking and code corruption since the data is not kept in a single location. Decentralization, which allows parties to deal directly with one other, for example via smart contracts, reduces costs and is the core benefit of blockchain technology. On a broad scale, this basically entails the dismantling of power centers like governing bodies and their institutions, central banks, etc.