Decentralization brings not only a new monetary movement stepping away from traditional centralized banking, but it also brings about new business models, new technologies and new globally inclusive funding mechanisms.

In the above video, block.one CEO Brendan Blumer talks at London Fintech Week about Decentralized Autonomous Corporations, also known as DACs.

In a DAO/DAC, smart contracts act as agents running on Blockchains that execute a prespecified or preapproved task based on various events and conditions.

A very successful DAC : BitShares

One example of a DAO/DAC that has already proven to be a great success is BitShares. BitShares offers products to the public for a profit. BitShares is like no other corporate entity or company preceding it, being it is a DAC run by the shareholder community.

bitshares - the world's first decentralized exchange
bitshares – the world’s first decentralized exchange

BitShares is an open-source, public, blockchain-based, real-time financial platform. It provides a decentralized asset exchange – similar to NYSE but for cryptocurrencies and without the need to trust a central authority to handle all the funds – that facilitates trading using an international network of computers, in which anyone can take part. BitShares also provides a cryptocurrency token called “BTS”, which can be transferred between accounts and is used to collect fees for network operations and as a collateral for loans. The platform was designed by Daniel Larimer, an American programmer and entrepreneur, and launched in July 2014. Since March 2016 the project has been a part of Microsoft Azure Blockchain as a Service package.[1]

A question often asked to the BitShares community by newly joined members is…

Who makes the decisions around here?

“Well there are no fat cat, roadster driving, cognac sipping, cigar smoking bosses around here…”

Decisions are decided by Blockchain Consensus.

As people begin to grasp the decentralized consensus answer to their question, they then usually want to know more about the mechanics behind reaching an ‘on-chain consensus’, especially when used within a ‘for-profit’ business model.

BitShares is run 100% by its shareholders.

However, there still needs to be governance over a democracy, or only ‘forking chaos’ would ensue (see Bitcoin). So it is provided by the committee (also voted in or out by the shareholders). Shareholders can also form and propose a Committee member, or just vote for other existing members. All decisions can be voted on by all shareholders (inclusive, regardless of holding size). [2]

To learn more about BitShares please visit their website at: https://bitshares.org

Decentralized Autonomous Organisations (DAOs) & Corporations (DACs) will define a new type of “Public” company governed by smart contracts and community consensus in a provably democratic way.

Decentralized budgeting such as community agreed inflation rates and what to do with the proceeds of network currency inflation, are moving us, not only into the era of the “Open Source Organisation” but also the “Open Source Economy”. Corrupt human stakeholders and personnel attempting to hide organisation information, siphon money “under the table” or fraudulently fix stakeholder voting mechanics will have a much harder time doing so within a DAO or DAC blockchain-based model than they currently do in traditional models.

If corporate white-collar crimes against the many continue to not be taken seriously by law makers and judges, the DAO or DAC model offers a solution.

This movement will surely see the world through drastic changes to not only how an Organisation or Company is funded and operates, but also for what it means for employees and digital freelancers to “work”. For many IT, software & digital freelancers, it will allow for more choice, more freedom and work flexibility.

The ways people work and operate various business models are set to become far more dynamic and efficient.

As DAOs and DACs continue to evolve, the ‘open-source organization’ of the future will have numerous advantages over traditional centralized models such as:

  • More efficient allocating of resources
  • Greater transparency of internal accounting
  • Inclusive environment for everybody with internet access to participate (compared to draconian ‘accredited investor only’ status)
  • Provably fair and open voting consensus mechanisms
  • Unstoppable vested interest, utility token holders and users become vested ‘volunteer’ team members
  • Far greater accountability of all human decision makers, notably stripping power from the top level (CEOs, CTOs, CFOs etc.)
  • Unparalleled record keeping through immutable blockchains compared to centralized bureaucracy

I believe that decentralization will help steer the future of business and organization management to be more innovative, inclusive and transparent.

As we head towards mainstream adoption of Decentralized Autonomous Organisations and Corporations, can the traditional centralized models stand a chance to compete with the emerging decentralized approach?

EOS.IO dApps Ecosystem – infographic produced by eostribe.io

Disclaimer: Cryptocurrencies & digital assets are highly volatile so one should only invest what they can afford to loose. Dapp.Tech does not offer financial, investment or trading advice. Always do your own independent research and seek the counsel of a qualified financial advisor before investing yours or anyone else's money.
 
Written by Blockrev @ Dapp.Tech on 9th June 2018 and published by Dapp.Tech on 10th June 2018. Video published by EOS.IO on Jul 26, 2017 via EOS.IO YouTube Channel. Additional reference sources: [1] https://en.wikipedia.org/wiki/BitShares [2] https://steemit.com/bitshares/@apasia.tech/bitshares-rough-guide-to-the-dac-part-1-committee-members-and-governance. EOS dApp Ecosystem Infographic by eostribe.io

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