The Rise of the Decentralized Organization We’re hearing a lot about Bitcoin right now. It’s gaining attention because of its unfathomable price increases, its entrance into the mainstream financial system, and its everlasting debate about whether it’s a bubble or a bona fide new financial vehicle.
by KIRBY DARCY CEO & CTO and Pay Per Growth
But this article isn’t about Bitcoin. It’s about the incredible technology that powers Bitcoin and other cryptocurrencies. More specifically, it’s about the decentralized ethos that begins with Bitcoin, but that’s spreading across virtually every sector of business and commerce. As The Brookings Institute notes, “Bitcoin, the digital currency, has attracted both attention and controversy. But the most potent innovation is not the currency itself. Rather it’s the technology that undergirds bitcoin.” It’s known as the blockchain, and its applications are seemingly unimaginable. The blockchain is a decentralized computer network that is accounting for and securing the most valuable cryptocurrencies in the world. It’s distributed ledger technology is compared to the founding of the internet, and its use cases are as many, as developers can conceive. On the subject of the blockchain, The World Economic Forum notes that “Unlike the internet alone, blockchains are distributed, not centralized; open, not hidden; inclusive, not exclusive; immutable, not alterable; and secure.”
They may be the best thing happening to the internet at a time when the internet might be the best thing happening to us. One of the blockchain’s most notable features is smart contracts. These contracts are escrow-like services that are executed by computer code based on pre-determined stipulations. Tangentially, the blockchain enables the security and tokenization of information, only exposing a unique digital identifier. These two factors are dynamic features that allow for unbridled development in the digital age. More specifically, the blockchain is enabling a new type of organization that is tangibly equipped by the blockchain, but that is also philosophically aligned with the technology. Decentralized Organizations are arising as a new method for structuring and implementing a business. Decentralized Organizations, also known as Decentralized Autonomous Organizations (DAOs), are organizations based on the blockchain and that rely on smart contracts and tokenized assets. While DAOs take many nuanced forms, DAOs are generally transaction-based organizations that depend on the blockchain to facilitate and secure financial or data transactions. Because of its many benefits, companies are finding creative and unique projects that can be implemented in a DAO structure.
THE BENEFITS OF DECENTRALIZED ORGANIZATIONS EFFICIENCY For many businesses, growth and expansion are continually hindered by slothful business practices. Seemingly mundane tasks like developing contracts, executing services, or conveying vital personal information can take days or even weeks to create and process. With the blockchain’s smart contracts and tokenized information, these actions become instantaneous. For example, a DAO performing income verifications for renting agencies could instantaneously complete this task and relay the information to the company with an automatic process using tokenized information and a smart contract. Before, this process could take days or weeks, but a DAO could complete it much more quickly. OPPORTUNITY When developing an organization, there are several limitations that can cause a project to fail. While some of them relate to the projects efficacy or the skill of its developers, many have nothing to do with the project at all. For example, oppressive government regimes can curtail organizations for arbitrary and unnecessary reasons. Moreover, this year has seen shocking displays of physical conflict around the world, which, if they happen to occur around an organization can destroy or diminish the organization’s capacity. DAOs give anyone with an internet connection an opportunity to develop and deploy an organization regardless of location, culture, or economic cir-
Published on Dec 28, 2017