The World Economic Forum (WEF) said governing blockchain appropriately will bring out its best qualities. It compares the blockchain era to the first era of the Internet.

The blockchain era should not be governed by nation states, state-based institutions or corporations, said the WEF in a white paper titled Realizing the Potential of Blockchain A Multi-stakeholder Approach to the Stewardship of Blockchain and Cryptocurrencies. Blockchain needs to be governed through a multi-stakeholder approach using what the WEF calls “global governance networks” – a concept developed in its previous programme investigating multi-stakeholder networks for global problem-solving.

Blockchain should be governed by an open network of stakeholders so as to develop it to its fullest and most inclusive, said WEF.

WEF notes that the genius of distributed ledgers is that the technology (and everything that happens with it) is and must be distributed. Power is distributed. Heavy-handed government intervention would kill this embryonic technology in its egg, it adds.

Seven types of networks that can govern blockchain

The WEF discusses seven types of networks that operate by consensus, that could govern blockchain effectively. They are:

Standards networks, such as the Internet Engineering Task Force, who spearhead technical specifications and standards, the building blocks of the product, and infrastructure development that leads to mass adoption.

Knowledge networks, such as the IIntternet Research Task Force. The primary function of knowledge networks is to conduct research and develop new ideas that can help solve global problems

Delivery networks, such as the International Corporation for Assigned Names and Numbers. This class of networks actually delivers the change it seeks, supplementing or even bypassing the efforts of traditional institutions.

Policy networks, such as the Internet Policy Research Initiative at the Massachusetts Institute of Technology (MIT), which works with technologists and policy-makers to increase the integrity of interconnected digital systems. These networks support policy development or seek alternatives for policy, whether governments support them or not. The goal is to inform, if not shape, the policy-making process of corporations and governments so that it is more transparent, shared and inclusive.

Advocacy networks, such as the Alliance for Affordable Internet. Advocacy networks seek to change the agenda or policies of governments, corporations and other institutions.

Watchdog networks, such as the Electronic Freedom Forum. These networks scrutinise organisations to ensure that they behave appropriately. Topics range from human rights, corruption and the environment, to financial services and commercial practices. In the process, they drive public debate, boost transparency and ignite movements for change.

Networked institutions, such as the World Economic Forum. Some networks provide such a wide range of capabilities that we describe them as “networked institutions”. They are not state-based but true multi-stakeholder networks. The value they generate can range from knowledge, advocacy and policy to the actual delivery of solutions.

Stewardship, not top down regulation

By governance, the WEF means stewardship, which involves collaborating, identifying common interests and creating incentives to act on them, not government, regulation or topdown control.  There are governance needs at three levels: blockchain platforms (such as Bitcoin and virtual currency exchanges), application and the ecosystem as a whole. Unlike the internet of information, which is a vast network of similar networks, this internet of value requires stewardship at not just one level but three.

The eight stakeholders in the WEF ecosystem are innovators, venture capitalists, banks and financial services, developers, academics, non-governmental organisations (NGOs), government bodies, and users or citizens.

The WEF also urges stakeholders in the space to harmonise their activities, such as to codify their common ground through standards networks, as well welcome stakeholders with radically diverse views of what needs to be done through networked institutions.