Some of you may be wondering why we are covering governance in a blockchain book. After all, aren't blockchain networks supposed to be decentralized, and thus guarded against the control of a single entity? While this is true from a technology perspective, the reality is that we are human, and for an enterprise-grade blockchain network to succeed, there are a lot of decisions that need to be made throughout the life cycle of the network.

Even bitcoin, the decentralized, anonymous, permissionless network, must deal with important and hard decisions. A case in point is the controversy around bitcoin block size. In the early days of bitcoin, a limit of 1 MB was set on the block size. As the network scaled up, this limit became problematic. Numerous proposals were issued, but the need for a consensus across the entirety of bitcoin nodes made the change difficult to agree on. This debate started in 2015, but the community had to wait until February 2018 for a partial solution, SegWit, to be partially adopted. We say partial because SegWit, which stands for segregated witness, only alleviates the problem by separating the signatures from the transaction payload, thereby allowing the inclusion of more transactions within a block—a lot of discussion and exchanges to reach a partial answer.

Furthermore, consider that blockchain business networks are meant to create trust in an environment where not all participants fully trust each other. How will they reach a consensus on how to manage a network?

Knowing there will be conflicts and disparate views, how can we address this? Well, we need a process that will involve the important decision makers of each key organization. There needs to be a basic agreement on a process that participants agree to follow and respect the outcome of. We need a way to govern the network—we need governance.

So, is governance about decision making? Not really. Governance is about providing a framework that guides the decision-making process. It does so by providing a clear delineation of roles and responsibilities, and ensures that there are agreed processes to reach and communicate decisions.

We've been talking about decisions in a generic fashion, but what types of decision need to be managed through the governance process? We will properly answer this question in the Roles and processes section, but for now, suffice it to say that everything that deals with funding, the functionality roadmap, system upgrades, and network expansion are certainly key topics that should be covered by a governance process.

Business and IT governance are topics that have been covered at length. As such, you will find many IT governance standards that aim at defining a proven structure to guide practices within the IT industry. A few examples of such standards are:

• Information Technology Infrastructure Library (ITIL)
: ITIL is primarily focused on how IT renders services to the business and aims at defining a process model that supports IT service management, essentially expressing an IT service as a function of the business benefits they bring instead of the underlying technical details.
• Control Objectives for Information and Related Technologies (COBIT): This standard is broken down into two parts: Governance and Management. The governance portion of COBIT focusses on ensuring that the enterprise objectives are met through a series of control objectives around the evaluation, direction, and monitoring processes.

In any case, standard approaches always need to be adjusted and adapted to the business model and context.