Watering The DAO
It is not often I get to write these words and mean them: something unique, something that smells like ‘history-in-the-making’ is happening. As I write this, The DAO — the first autonomous organisation that lives entirely on a blockchain — is the second biggest crowdfund ever.
As The DAO passes the $100 million mark, I think it a good time to take a step back and consider this autonomous entity that has so suddenly and remarkably come into being with a broader lens than those focused purely on technical details or legal concerns.
Before I so blithely overlook the interesting stuff, I should note that there are many wonderful posts and videos out there which provide all of the above and more:
https://www.youtube.com/watch?v=BtKo-4usyQs — for Griff Green’s short explanation.
https://www.youtube.com/watch?v=5BkQ0te_TA0 — for a deep dive into the code.
https://www.youtube.com/watch?v=weJXYCd9GsM — for a long explanation of life, the universe and everything from Stephan, Christoph and Simon.
https://daohub.org/voting.html — for an explanation of how the voting works. Explore the whole site though.
https://forum.daohub.org/c/theDAO or https://dao.consider.it/ are good places to get community views and interact with the people who actually make The DAO possible.
https://www.linkedin.com/pulse/how-sue-dao-stephen-palley — a great article that instigated much animated discussion. Read it for a more balanced and more cynical view and find Stephen Palley’s other articles on LinkedIn, they’re all worth the effort.
https://blog.daohub.org/daohub-verification-of-0xbb9bc244d798123fde783fcc1c72d3bb8c189413-d755317ee724#.cr6mtbr6h — for technical verification of the implemented contracts. Also check this whole blog out for some other really great and valuable reads. Now, back to my article.
While it is actually the detail that is most interesting, I thought I’d devote one article to considering what such a radically different corporate, social, and political organisation might mean in the ongoing struggle for everything from effective global organisation to wealth disparity to net neutrality, privacy, and encryption.
I was lucky enough to be involved with the people responsible for coining the term DCO or DAO — a decentralized autonomous (or cooperative) organisation. Known as Swarm, we wrote a legal whitepaper and started making the first, few tentative steps into the murky world of regulation and oversite that proved to be our undoing. Many lessons were learnt.
There are some key differences between The DAO and Swarm, chief among them being that The DAO is made only of code that exists entirely within the public sphere and that has been implemented on a public blockchain — in this case Ethereum. This means that the business logic that has been codified as the ‘rules of engagement’ for everyone (let me stress that: for everyone) can be relied upon to behave predictably and deterministically in any and all cases. It is a landmark moment for the transparent and fair organisation of many people with many divergent interests and agendas.
Now, I am not a fan of those who would put everything on a blockchain (such data architectures are inefficient and ill-suited to a great many use cases), nor do I believe in decentralization for decentralization’s sake (see the point about inefficiency above).
However, I think the one place where decentralization is both extremely necessary and potentially highly effective is within social power structures.
This, to me, is the beautiful paradox about the world’s first organisation legitimately built entirely on a blockchain and nowhere else. While it is made of bits of autonomous code (and while Skynet is almost definitely behind it all) it has only been brought into existence as a potent entity by human beings who made a singular decision to take part, and it is these human beings who will benefit from its workings. Code has literally and directly created community, and that community has given the code which made it great power (as it stands $100 million worth of power). It is one of the most virtuous feedback loops I have ever seen. Norbert Wiener would be proud.
If you make your way through the list of information above, you will see that not everyone agrees with me. In fact, a man I have great respect for — Stephen Palley — has posted a number of brilliant articles raising some serious legal concerns for organisations of this type. But I want to go further back than this, beyond details to meaning again. The mere fact that I can write ‘organisations of this type’ should indicate to you that what is really occurring here is a paradigm shift in how we think about creating, controlling, and distributing value.
Think about that for a second, because ‘value’ is a broad and interesting word in the context of these organisations.
On first becoming interested in Bitcoin, and then other cryptocurrencies, I thought it obvious that there is something very wrong with the world we live in. I thought that everyone could sense the cracks in their own worldviews as we became increasingly connected and that they would welcome the light that came pouring through such holes in the facade of things. I thought bitcoin and a few other technological advancements were the only way to fix all the broken things we see around us when we have the courage to look up from our daily mundanities. To really see.
But this was a naive view to take. The situation is so much more complicated than simply introducing a global currency owned by no-one and fighting for the free and unhindered flow of information. A teacher I spoke to at the time asked me why I wanted to change the world when that is the only thing that we know for certain this world will ever do: change. Why I wanted to go sticking my nose where it didn’t belong.
It is not a new or mind-blowing thought, but technological innovation will not make things better by itself. Rapid advancements in AI and all sorts of virtual, augmented and mixed realities do not feed the beggars I walk past every day.
Having the ability to send money rapidly across a cryptographically secure network with no intermediaries is meaningless to people who have no money to begin with.
It is how people use technology that matters. We are in constant dialogue with our tools — ever since the invention of hand-axes, sharpened sticks, and ochre paint in the distant reaches of my continent’s memory — we have shaped the world with our tools and the world has acted back to shape us.
Seen in this light, The DAO is a tool which allows for the active and effective cooperation of any number of geographically distant players in their mission to create technologies that they believe will make their lived world a better place. It is code powered by humans and humans empowered by code.
It is a technology of and for the social self.
What it is, beneath all the ‘real world’ concerns about legality and insurance and economic structure, is a necessary evolution in how we think about the interface between human, organisation, and technology.
Vinay Gupta often points out that bitcoin (and blockchains more generally) are radical in that they combine the concepts of databases and networks and that — combined with the rapid communications and innovation-at-the-fringes enabled by the web — this has unleashed what he calls a form of ‘unrecognisable capitalism’.
Well, we have all that in Ethereum and now — built on top of it — we have an entity which explicitly combines social organisation with the transfer of value.
Again, I think this is a point many people miss. In the world we live in currently, social organisation all-too-often is not linked to either the creation or distribution of value. In fact, it is often the case that social organisation is necessitated by the unfair distribution of that value. While I don’t believe that The DAO will make all this magically go away, I do think it a necessary and momentous step in the process of creating a more equitable world.
In its current form, this obviously isn’t all true due to the technological barrier to entry — only those who know what Ethereum is and how to operate a wallet properly (harder than it sounds) can really reap the benefits for now. But remember, we are talking of shifts in paradigm and these take a long time. That said, it is a special privilege to be there at the birth of something revolutionary.
After all the speculation and nay-saying, one thing is for sure. The DAO exists. And it can never go away.