Here Come the DAOs
New and free business structures operate autonomously on the Internet
Ever heard of a DAO? Decentralized autonomous organization? What on earth is that? Well, this is the newest Internet version of an organization made available through blockchain technology. What is a decentralized autonomous organization?
Well, let's compare it to the kind of organization that you know very well -a company. You work for companies, most likely you work for a big corporation. Perhaps this corporation is centralized.
It is located in one specific place. That's where the corporate headquarters are. You've got the chief executive officer and the board of directors. They make the decisions as to everything that happens in that company. They determine the products that they're going to manufacture and sell. They determine who gets hired, how much they're going to pay those people, what the product is going to be priced at, where it's going to be sold and how it's going to be sold. Everything is centralized at the very top of that food chain. And everybody else, all the worker bees, have to follow those instructions, whether they like it or not. You don't like it, you can quit, but that's about it.
Along comes a DAO, a decentralized autonomous organization. This exists on the internet. There is no central authority. Instead, a group of people get together, they buy a token, giving them access to this DAO. The token is basically their access point. Picture it like an airline ticket letting you on the plane. And once everybody is a member of the DAO, everybody gets an equal vote. The DAO will be formed to accomplish a particular goal and those who share in wanting to get that goal accomplished, we'll all chip in to provide the money that the DAO needs to pull it off.
The most famous example of this occurred last year. The Constitution DAO. A whole bunch of investors and consumers got together, contributed $40 million for the purpose of buying a copy of the US Constitution. They were outbid by a billionaire who paid $43 million. These folks only raised $40 million, and so they were outbid at auction. But the goal they had was to buy this copy of the Constitution. Had they won that auction, they then would have collectively decided where would the Constitution be stored, where would it be displayed, who would be responsible for managing it. This is a collective environment. You can call it a commune kind of structure where everybody collectively has one vote in how this is all operating. There's nobody in charge, nobody in command. Instead, it's decentralized and it operates autonomously all on the Internet. Nobody needs to have an office building. Nobody is spending any money to operate the business. It all operates for free and autonomously on the Internet. A decentralized autonomous organization. That could well be the corporate structure of the future. And if you would like to learn more about DAOs, read my new book, The Truth About Crypto.