DAOs and a civilization shift
Humans have benefitted greatly & been pushed forward by tech. advancement. Like the printing press, the steam engine etc DAOs can bring about civilizational changes that propel us to the future.
Technological advancements truly mark the progress of humanity. It has the uncanny ability to make humans as a whole more productive. Technology also helps us scale - the ability to reach far and wide.
We can look at examples as far back as the printing press or the steam engine or the space race, or as recent as amazon.com which managed to scale traditional in-person commerce activities on a global level or facebook.com which managed to bring about interconnectedness that was never seen or even possible before.
Blockchain technologies can be that next technological advancement that ushers humanity into a new world, a world that is transparent, verifiable therefore not requiring us to place trust in anyone.
The fundamental ideas on which blockchain technologies are being built on can potentially impact many facets of humanity at a very prominent and fundamental level, and one such facet blockchains are prime to disrupt are Organizations.
We humans have always worked in groups, and we’ve benefited greatly from it. We’ve built guidelines, rules, social structures and more around our collective ideas and translated them onto the legal system in todays constitutions. This meant the system is passive in nature, requiring high levels of governing and enforcement. This is where new ideas, powered by blockchains have the potential to disrupt traditional ways of building and running an organization. Say hello to DAOs!
DAOs or Decentralized autonomous organizations
DAOs can be considered as a way to digitize working together, where rules and guidelines are agreed upon by the stakeholders, and placed within a blockchain to ensure its execution when the conditions are met. This means, the way in which organizations run is being disrupted. These decentralized, internet-native, or more accurately, blockchain-native, trustless, self-governing organization are DAOs or a Decentralized Autonomous Organizations.
How to DAOs work?
Breaking down the previous sentence gives us insight into how DAOs work:
Blockchain-native: Rules are coded and placed on the blockchain. This means, all actions will be collectively made and any changes need votes.
Self-governing: DAOs executes autonomously when conditions are met and the transaction is entered into the blockchain.
Trustless: Since all actions taken by the blockchain native self governing organization are available on the blockchain, anyone can verify its validity.
The functioning of DAOs might sound similar to smart contracts - because - they are. Smart contracts are usually considered the backbone of DAOs.
What do DAOs mean for the real world?
Lets draw a clearer parallel for DAOs similar to the ones we saw before with amazon or Facebook. When the nature of work is independent of its location (Thanks web1 and web2!), companies are now looking at a global talent pool and the talent is now looking at a global employer pool. This gave rise to Digital nomads who travelled the world working because all they needed to get work done was a laptop and an internet connection. Even with this, organizations however stayed fairly unchanged - they were registered, governed, and enforced like before.
DAOs are organizations that don’t live in a country but instead live on the blockchain. This then becomes the true next step in revolutionizing organizations, work, governance, and enforcement.
Theodor Marcu writes this for 1729.com
A DAO uses blockchains and smart contracts to organize the mechanics of corporate governance, thereby facilitating collective participation of distributed participants in the funding and production of community goods
That statement encompasses the nature, functioning and the vision of DAOs.
What’s next?
The legalities for one. It is not yet legally recognized in most if not all places, although states like Wyoming have introduced legislature to legally recognize them.
Additionally, DAOs are relatively new. We are seeing interesting projects come up, but running a truly decentralized organization as a DAO with people working across the globe is yet to be seen.
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This is 1/7 articles I’m writing as part of the tech progressive - where we’re collectively authoring 1 article a day on everything blockchain!