When I joined Hedera in the summer of 2018, there was a (very lofty) vision of building the Hedera Governing Council – a group of up to 39 highly diversified, globally leading enterprises to steward the stability, direction, and growth of the Hedera network. For a public network in the distributed ledger space, this was unprecedented.
This past month, we made it a reality by announcing the first five members of the Hedera Governing Council. If you missed the announcement video at the Hedera Annual Assembly 2019 event in Seoul, South Korea, be sure to watch the replay here. I highly recommend watching the segment with Scott Thiel, Partner at DLA Piper.
Initial governing members
We announced our initial five council members this past month and are looking forward to batched announcements of more members throughout the rest of 2019. These organizations have taken a big step with Hedera. I invite you to get to know the first five members and hear from a few of them directly.
Deutsche Telekom’s T-Labs
Headquarters Bonn, Germany
Deutsche Telekom market cap $79B USD
Deutsche Telekom is one of the world's leading integrated telecommunications companies, with some 168 million mobile customers, 28 million fixed-network lines, and 19 million broadband lines. Telekom Innovation Laboratories (T-Labs), Deutsche Telekom’s central research and innovation unit, is the business unit driving their participation in the council.
Headquarters London, United Kingdom
DLA Piper market cap Unknown (Private)
DLA Piper is a global law firm with thousands of lawyers located in more than 40 countries throughout the Americas, Europe, the Middle East, Africa and Asia Pacific. They oversee the largest merger and acquisition deal volume in the world.
Headquarters São Paulo, Brazil
Magazine Luiza market cap $31B USD
With 787 physical stores, a website and nine distribution centers strategically located in sixteen Brazilian states, Magazine Luiza also has more than 20,000 employees, and a base of approximately 45 million customers.
Headquarters Tokyo, Japan
Nomura Holdings market cap $14B USD
Nomura is a financial services group with an integrated global network spanning over 30 countries and managing over 110 trillion yen in retail client assets alone. They service the needs of individuals, institutions, corporates, and governments through four business divisions: Retail, Asset Management, Wholesale (Global Markets and Investment Banking), and Merchant Banking.
Headquarters Bern, Switzerland
Swisscom market cap $2B USD
Swisscom, Switzerland’s leading telecoms company and one of its leading IT companies, has latest annual revenue of 11.7 billion USD. Swisscom Blockchain is a subsidiary focused on forwarding distributed ledger applications in and for Switzerland.
The importance of decentralization
As Leemon mentioned in his Annual Assembly presentation, this announcement is only the beginning to usher in a diverse set of council members intended to help ensure the truly decentralized nature of the Hedera public network.
For true decentralization, we must consider multiple factors, including: the governing body itself, the nodes running on a public network, the technology operating on said nodes, and the distribution of stake (cryptocurrency) required in proof-of-stake systems for nodes to achieve consensus / prevent attack.
The governing body is foundational
In unpacking the factors above, the governing body that oversees or delegates the direction of the network and platform’s codebase, and management of treasury, is truly foundational to the public network’s commitment to decentralization. The initial members chosen to govern Hedera’s public network showcase the quality and diversification across global industries and regions, bringing unique expertise to the table that will shape the network’s future, while ensuring that no single entity has too much power.
The five initial members above join the creator of hashgraph, Swirlds, to form the start of the Hedera Governing Council. To maintain an equal distribution of power, all members of the Hedera Governing Council, including Swirlds, have an equal vote and share in oversight of the Hedera network, including issues such as the direction of software that we expect will eventually run on thousands of public nodes, and the Hedera platform’s codebase. All members, outside of Swirlds, serve for 3-year terms, with a maximum of 2 consecutive terms, and have an equal say in all decisions submitted to a vote. And finally, a unique aspect of the Hedera Governing Council, which offers a truly enterprise-grade level of stability, is that no member (or minority group of members) can run off and fork the network, platform, or cryptocurrency; the hashgraph consensus algorithm is proprietary with open review code, and a no-fork guarantee.
This model separates governance from consensus. When comparing the Hedera Governing Council to other networks, it is important to note that, while council members will run nodes, once the network’s testing phase is complete and adding a node is permissionless-meaning anyone can add a node and contribute to consensus-the council will have no priority over other nodes. For common questions related to governance, be sure to check out the Hedera FAQ.
A decentralized future ahead
Now, for the first time, everyone–consumers, startups, and enterprises alike–can look forward to an enterprise-grade public distributed network that can balance innovation and stability. We hope you are as excited as we are to usher in this new era of decentralization with the guidance of the Hedera Governing Council. Thanks for joining us and being along for the ride.