Understanding Decentralized Governance

Decentralized governance refers to a system where decision-making authority and control are distributed among a network of participants rather than concentrated in a central authority. In traditional governance models, power is often centralized in the hands of a few individuals or organizations, leading to potential issues of opacity, corruption, and lack of inclusivity. In contrast, decentralized governance on the blockchain aims to create a transparent, accountable, and participatory decision-making process.

Off-chain governance mechanisms involve decision-making processes that occur outside the blockchain protocol itself. They often rely on social consensus and involve stakeholders engaging in discussions, debates, and voting through various means, such as online forums, community platforms, and public forums. Lets explore some notable off-chain governance mechanisms:

On-chain governance mechanisms, in contrast to off-chain mechanisms, involve decision-making processes that occur directly within the blockchain protocol itself. This form of governance often utilizes smart contracts or consensus protocols to enable voting and decision-making. Lets explore some common on-chain governance mechanisms:

Decentralized governance mechanisms in blockchain technology offer a paradigm shift in how decisions are made, fostering transparency, inclusivity, and community empowerment. By leveraging distributed consensus, smart contracts, and governance tokens, blockchain projects can create more democratic and accountable systems. Despite challenges, the potential applications of decentralized governance are vast, spanning from DeFi to public sector governance. As we move forward, embracing decentralized governance can unlock the true potential of blockchain technology, revolutionizing the way we govern and collaborate in various domains.

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Decentralized Governance Mechanism in Blockchain - LCX

Ethereum Classic: Exploring the Immutable Side of the Ethereum Blockchain

Cryptocurrency & Blockchain

In the world of cryptocurrencies, Ethereum Classic (ETC) stands as a testament to the immutability and resilience of blockchain technology. As an offshoot of the popular Ethereum blockchain, Ethereum Classic has carved out its own unique path, attracting a loyal following of enthusiasts and developers. In this comprehensive article, we will delve into the fascinating world of Ethereum Classic, exploring its origins, core principles, notable features, and the reasons why it has become a prominent player in the ever-evolving crypto landscape. Amidst the diverse crypto ecosystem, there are also online trading platforms like Bitcoin Era which is an online trading platform like this trading bot that provide opportunities for investors to participate in the digital asset market.

To truly understand Ethereum Classic, we must first revisit the genesis of the Ethereum blockchain itself. Ethereum, envisioned by Vitalik Buterin, was designed as a decentralized platform for executing smart contracts and building decentralized applications (DApps). However, a contentious hard fork in 2016 resulted in the creation of two separate chains: Ethereum and Ethereum Classic.

Ethereum Classic emerged as the original chain that continued to adhere to the principles of decentralization and immutability, refusing to modify the blockchain to reverse the effects of a high-profile hack. This unwavering commitment to preserving the sanctity of the blockchain established Ethereum Classic as a symbol of trust and resistance to censorship.

At the heart of Ethereum Classic lies its core principle of immutability. Unlike other blockchains that might choose to modify or reverse transactions, Ethereum Classic ensures that once a transaction is recorded on the blockchain, it remains there permanently. This trustless environment provides individuals and organizations with a secure platform to conduct business without the fear of interference or manipulation.

Ethereum Classic takes pride in its decentralized governance model, which empowers the community to participate in the decision-making process. This inclusive approach allows stakeholders to propose and vote on network upgrades, fostering a sense of ownership and consensus among ETC holders.

While Ethereum Classic has its unique identity, it remains compatible with the Ethereum ecosystem. This interoperability opens up a world of possibilities for developers, as they can leverage existing tools, frameworks, and smart contracts to build applications on Ethereum Classic.

Ethereum Classic maintains a high level of security by utilizing robust hashing algorithms and a proof-of-work consensus mechanism. The network has proven itself resistant to attacks, ensuring the integrity and reliability of the blockchain.

The immutability and trustlessness of Ethereum Classic make it a compelling choice for various real-world applications. Lets explore some notable use cases:

With the rapid growth of IoT devices, Ethereum Classic offers a secure and decentralized platform for managing transactions and interactions between connected devices. Its immutable nature ensures that the integrity of data transmitted through IoT networks remains intact.

Ethereum Classics transparency and traceability make it an ideal solution for supply chain management. Through smart contracts, stakeholders can track the movement of goods, verify authenticity, and automate payment settlements, reducing inefficiencies and fraud.

DeFi has gained immense popularity in recent years, and Ethereum Classic serves as a solid foundation for decentralized financial applications. By leveraging ETCs smart contract capabilities, developers can create decentralized exchanges, lending platforms, and other innovative financial instruments.

As Ethereum Classic continues to progress, its devoted community is determined to propel its expansion and acceptance. The Emerald Project is an ongoing development that seeks to improve the user experience and broaden the Ethereum Classic ecosystem. These advancements and the projects endeavors position Ethereum Classic for further growth and the exploration of new potential applications.

In conclusion, Ethereum Classic embodies the immutable side of the Ethereum blockchain, standing as a testament to the principles of decentralization and trustlessness. With its unyielding commitment to preserving the integrity of the blockchain, Ethereum Classic has earned its place in the crypto world. As the ecosystem expands and new possibilities arise, Ethereum Classic remains at the forefront, ready to empower developers, businesses, and individuals seeking a secure and censorship-resistant platform.

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Ethereum Classic: Exploring the Immutable Side of the Ethereum ... - Rebellion Research

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August 9, 2023 11:45 pm

Last Updated: August 10, 2023 10:47 am

Starting on August 15th, the Bank of Russia (BoR) will embark on its central bank digital currency (CBDC) journey. The central bank will bring in 13 commercial banks to test the digital ruble, alongside a select group of clients, according to Olga Skorobogatova, First Deputy Governor of the Bank of Russia.

During the testing in an institutional environment, the digital ruble will undergo tweaks for a smooth transition into retail. This includes opening digital wallets, person-to-person digital ruble transfers, automatic bill payments, and QR code-enabled payments across 11 Russian cities.

In 2024, testing will expand to business-to-business transfers and dynamic QR code-enabled payments, with expanded templates for automatic bill payments. Based on BoRs projections, the digital ruble should be fully deployed for businesses and individuals by 2025.

In contrast, Russias historic trading partner, the now embattled EU, plans to launch the digital euro in 2027. As a fragmented union with heavy bureaucratic machinery, Europes CBDC is undergoing multiple feature-testing cycles.

The digital ruble and the digital euro are based on permissioned distributed ledger technology (DLT), using self-executing smart contracts to automate payments in various contexts. The question is, what does Russia expect from fast-tracking its CBDC deployment?

In March 2023, the Bank of Russia (BoR) postponed digital ruble testing scheduled for April. Testing of real-time payments needed another regulatory framework to pass through the State Duma Committee on the Financial Market.

After more delay, President Vladimir Putin signed the package of bills on the digital ruble on July 24th. The goal is simple; take advantage of smart contracts to streamline Russias financial infrastructure, including cross-border payments.

Using smart contracts should lead to a reduction in the operational burden on banks and make the transactions of clients themselves transparent, which will not only reduce the possibility of misuse of the earmarked funds allocated by the state and business, but also unequivocally simplify control over concluded contracts

Vitaly Kopysov, Innovation Director at Sinara Bank, one of the selected 13 banks to participate in testing

Russias CBDC initiative stems from BoRs Guidelines for Financial Technology Development for 2018-2020. At a high level, this framework set the digital ruble to promote financial market competition, reduction of risks and costs, increase financial inclusion, and Russias international competitiveness.

On August 3rd, BoR finally approved the digital ruble logo, adding traditional coin elements with the symbolism of the existing Bank of Russia logo. As such, users will become acquainted with it across mobile banking apps serving as their digital wallets.

Regarding digital ruble transaction fees, BoR is going for maximum adoption first. For this reason, citizens will have zero fees for payments and transfers. This includes zero transfer costs between bank accounts and digital wallets and vice-versa.

On the other hand, businesses will have a fee of 0.3% for accepting payments for goods and services, but not above ?1,500 ($15.48). Likewise, housing and utility companies must pay 0.2%, but not above ?10 (14 cents).

Both businesses and individuals could open digital wallets without any fees. This fee regime should go into effect from January 1st, 2025, after digital ruble feature testing is completed and the CBDC is fully launched.

By 2025, likely, the Ukraine war will long be over. However, having become technically operational on August 1, the digital ruble could be used in its prototype form. Presently, Russia is suspended from the Bank for International Settlements (BIS), based in Basel, Switzerland.

This represents a stumbling block for Russias international presence as BIS is a clearing house for international payments. Furthermore, the BIS suspension lowers Russias creditworthiness, effectively restricting access to international credit lines.

According to Vladislav Ginko, economic lecturer at the Russian Presidential Academy of National Economy and Public Administration (RANEPA), the digital ruble could bypass this obstacle. Thats because digital ruble is not based on a single protocol visible on the BIS network.

Quite the contrary, with the help of the digital ruble in foreign trade, it is possible to effectively bypass the financial sanctions of Western countries,

Vladislav Ginko via BRIEF Telegram channel

Of course, it would be up to other central banks to interface with BoRs digital ledger directly, likely via BRICS nations and accompanying applicants. The digital ruble could be made interoperable with the BIS network if political conditions allow it down the line.

So far, sanctions have hurt the EU more than Russia, as evidenced by the EU entering a recession. Germany was especially hit by the sabotage of the Nordstream 2 pipeline, cutting off access to cheap Russian gas.

While Russia is mainly self-sufficient and abundant in natural resources, Europe is struggling with soaring electricity prices, further exacerbated by Germanys bizarre efforts to dismantle its nuclear power infrastructure.

This article originally appeared on The Tokenist

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Russias Biggest Banks to Start CBDC Trial this Month - 24/7 Wall St.

Layer 2 scaling solutionshave become increasingly popular in thecryptocurrencyindustry as the demand forscalabilityand efficiency continues to grow. These solutions aim to overcome the limitations of thebase layer, such as hightransaction feesand networkcongestion.

However, there are several different approaches to Layer 2 scalinginblockchainnetworks, each of which has its own unique advantages and disadvantages. This article aims to highlight the importance of Layer 2 solutions and compare various types available in the market.

Layer 2 solutions areprotocolsor frameworks built on top ofexisting blockchainsto enhance scalability and transaction throughput. Unlike traditional blockchains, Layer 2 solutions offload most of the computational work to an additional layer, reducing the burden on the main chain while still ensuring security anddecentralization.

These solutions achieve scaling by processing thousands of transactions off-chain and then bundling them into a single transaction on themain chain. In other words, L2 solutions make sure that the mainnet handles critical aspects of decentralization,data availability, and security while they divert the transactional burden onto their parallel network, de-congesting the mainnet in the process.

Layer 2 scaling solutions are crucial for the growth and adoption of cryptocurrencies. The underlying blockchains, such asEthereum(ETH), often face congestion and high transaction fees, making them impractical for widespread usage.

Layer 2s alleviate these issues by enabling faster and cheaper transactions, improving the user experience and incentivizing more active participation in the blockchain ecosystem. This allows the robust decentralized security standards of blockchains likeBitcoin(BTC) and Ethereum to become accessible to a wide range ofdecentralized applications(DApps) that are finding adoption.

Several types of Layer 2 solutions have emerged, each with its own unique approach to scaling blockchain networks. Here are some of the more popular ones:

Optimistic Rollups are Layer 2 solutions that prioritize scalability without compromising on the decentralized nature of the blockchain. They operate byexecuting transactions off-chainand then producingcryptographicproof that is submitted to the main chain.

In an Optimistic Rollup, the majority of the transaction processing occurs off-chain, in what is referred to as the rollup or commitment chain. This allows for faster transaction confirmation times and reduces the burden on the underlying blockchain network.

The key concept of Optimistic Rollups lies in optimistic assumptions andfraud proofs. Transactions processed off-chain are assumed to be valid, and any potential fraud is detected and challenged through the fraud proofs mechanism. If a fraudulent transaction is identified, the system falls back to the main blockchain to resolve the dispute and punish the malicious actor.

Optimistic Rollups offer several benefits, including scalability improvements by allowing more transactions to be processed off-chain, lower costs for users due to reduced fees, and improved speed of transaction processing. Additionally, they maintain compatibility with existingsmart contracts and Dapps without requiring significant modifications.

However, Optimistic Rollups also have certain limitations. Since the rollup chain is not fully decentralized and relies on the main blockchain for dispute resolution, there is a small delay before transactions can be considered final. Additionally, the security of the off-chain transactions depends on the correct functioning of fraud proofs.

ZK Rollups, also known asZero-Knowledge Rollups, are layer 2 scaling solutions that aim to improve scalability and reduce transaction costs by processing transactions off-chain and then creating succinct proofs that are submitted to the main blockchain for verification.

In a ZK Rollup, a set of transactions is aggregated and processed off-chain by a set ofvalidators. Instead of including all the details of each transaction, the validatorsgenerate a compact proof, also known as a ZK-SNARK (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge) or ZK-STARK (Zero-Knowledge Scalable Transparent Arguments of Knowledge) proof.

This proof provides cryptographic evidence that the transactions are valid without revealing any sensitive information. The proof is then submitted and validated on the main blockchain.

Using ZK Rollups, the main blockchain only needs to verify the validity of the proofs, significantly reducing the computational load and increasing transaction throughput. The main blockchain acts as a data availability layer, ensuring the integrity of the off-chain transactions.

Some benefits of ZK Rollups include increased scalability, reduced transaction fees, andimproved privacy. By aggregating multiple transactions into a single proof, ZK Rollups allow for a much higher throughput compared to processing transactions individually on-chain.

However, ZK Rollups do have certain challenges and limitations. For one, generating and verifying ZK-SNARK or ZK-STARK proofs can becomputationally intensiveand may require specialized knowledge.

Furthermore, the setup and maintenance of the ZK Rollup system also require a level of trust in the validity of the off-chain transactions. If amalicious actorsuccessfully creates an invalid proof, it could potentially compromise the integrity of the entire rollup.

Sidechains areseparate chains that run parallelto the main blockchain, allowing for increased transaction throughput and scalability. These chains can have their consensus mechanisms and rules while still being interoperable with the main chain, enabling assets to move between the two chains.

The main purpose of sidechains is to address the limitations of the base blockchain, such as scalability, privacy, and flexibility, while leveraging the security and decentralization of the parent blockchain.

Some key benefits of sidechains include scalability, customizability,interoperability, and enhanced privacy. Sidechains can also be designed for specific purposes, such as gaming, financial applications,supply chain management, or identity verification.

Its worth noting that the security of sidechains is interconnected with the main blockchain. Validators or auditors play a crucial role in ensuring the integrity and trustworthiness of the sidechains operations, and users must trust that the parent blockchain will accurately reflect their actions on the sidechain.

State and payment channels are off-chain arrangements where multiple participants can conduct numerous transactions without involving the main chain for each transaction. These channels allow users to interact privately and at a much higher speed, settling the final state on the main chain only when necessary.

State channels allow participants to conduct multiple transactions off the main blockchain, only recording the final state of thosetransactions on the blockchain. This means that only a transactions initial and final state is stored on the blockchain, avoiding the need to process each transaction on-chain.

Payment channels, a specific type of state channel, are used for conducting recurring or multiple transactions between two parties. Instead of each transaction being processed on the blockchain, the participants open a payment channel where they can conduct several transactions off-chain. The final state of these transactions is then recorded on the blockchain, ensuring security andtransparency.

State/payment channels work by leveraging smart contracts andcryptographic techniquesto facilitate off-chain transactions. They require participants to lock a certain amount of cryptocurrency in the channel, ensuring that any fraudulent behavior can be punished. Participants can update the state of the channel by creating and exchanging signed messages, which are valid until either party decides to close the channel and settle the final state on the blockchain.

Plasma chains are Layer 2 solutions that enable the creation ofinterconnectedblockchains called child chains. These child chains handle a subset of transactions off-chain and submit the summary to the main chain periodically.

The Plasma framework uses a combination of on-chain and off-chain computation to enable secure and efficient processing of transactions. When a user wants to interact with a Plasma chain, they deposit their tokens or assets into a smart contract on the main chain.

From there, they can transact within the Plasma chain,executing smart contracts, making transactions, and other operations. These transactions are recorded on the Plasma chain, but the final state is periodically committed back to the main chain, ensuring security and preventing fraud.

Plasma chains offer several advantages, including increased scalability, reduced fees, faster transaction processing, and improved privacy. The main chain can handle a higher throughput and accommodate more users by offloading a large portion of transaction processing to sidechains.

Although Plasma chains have the potential to significantly improve blockchain scalability, there are still challenges to address, such as data availability, mass exits, and networksynchronization.

Validiums are a blend of zkRollups and optimistic rollups. They execute computations and verify transactions off-chain, ensuring high scalability. However, unlike zkRollups, Validiums trade privacy guarantees for scalability, making them suitable for scenarios whereprivacy concernsare less significant.

Here are some of the most popular Ethereum Layer 2 scaling solutions currently available:

Layer 2 scaling solutions play a key role in addressing thescalability challenges faced by blockchainnetworks. By offloading most transactions onto secondary layers, these solutions enhance throughput, reduce transaction costs, and improve overall scalability.

There are a number of different approaches to Layer 2 scaling in blockchain, with two of the most popular ones being Optimistic Rollups andZK Rollups. There are also other less-known L2 types, which come with specific upsides and downsides.

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Pulling Back The Layers of L2 Scaling in Blockchain Networks - Techopedia