Take the Power Back: How Decentralized Organizations are Ushering In a Fairer Way of Doing Business
When the awards are dished out for tech word of the year, there is one vocable in particular that merits recognition. Forget chatbot, deep learning, and the Internet of Things — 2017 is all about decentralization. It’s a word that’s frequently linked with blockchain, that other, unavoidable buzzword, and for good reason. One of the defining characteristics of a blockchain is that it directly connects entities, peer-to-peer, user with service provider, customer with client. Middlemen? Blockchain has no use for them.
Whether it’s a decentralized ticketing platform, freight shipping network or messaging application, blockchain is the framework that makes it all possible. Low transaction fees, transparency, and immutability are the terms typically used to describe blockchains, but decentralization is arguably the most innovative feature they bestow.
Decentralization isn’t just about removing market inefficiencies and unseating industry-throttling oligopolies however — it’s inspiring a whole new system of governance, one in which the power resides with the many, not the few. When Satoshi Nakamoto mined Bitcoin’s genesis block on 3rd January 2009, he thought he was creating a new financial system. As it turns out, that maiden block paved the way for a radical new business model that eliminates traditional hierarchical structures.
Rejecting the Layer Cake
The conventional business model holds that decisions filter down the chain of command, trickling from top to bottom. That’s how it’s always been done, with layers of middle management and executives relaying instructions from up high and delegating to those down below. While alternative models such as cooperatives have been trialed, such systems have proven infeasible for the digital world we now inhabit.
Giving stakeholders an equal say in organizational matters sounds beautifully egalitarian but hopelessly impractical. It’s one thing to have a group of shareholders raise their hands at the AGM; it’s quite another to democratically obtain consensus on the hundreds of micro-decisions a business makes on an annual basis. We live in a world where even getting citizens to vote for their president in an orderly and equitable manner is impossible — what hope then for enabling stakeholder voting for organizations that must be nimble and reactive in order to compete?
Enter the DAO.
Take the Power Back
When Rage Against the Machine rapped about taking the power back, they probably weren’t thinking of decentralized autonomous organizations, but that’s essentially what a DAO does. As Wikipedia explains, a DAO “is an organization that is run through rules encoded as computer programs called smart contracts…a DAO’s financial transaction record and program rules are maintained on a blockchain”.
P2P cryptocurrency Dash is the example it cites of a decentralized governance system in action. Dash attains consensus for proposed network changes and development, with masternode operators each given a vote. One DAO that Wikipedia doesn’t cite, but probably should, is Aragon. Named after the autonomous community in northeast Spain, Aragon is a DAO that operates as a digital jurisdiction. It’s an internet version of Sealand, minus all the squabbles and squatting and…actually, scrap that. Aragon is nothing like Sealand: it’s a platform that makes it easy for organizations to create value without borders or intermediaries.
Organizations like BitPoint Network
What’s the BitPoint?
BitPoint is a P2P network that makes it easy for anyone to establish their own crypto-teller business, forming a sort of virtual ATM that exchanges fiat for crypto and vice-versa. Sounds innovative, right, but what’s that got to do with DAOs? Well here’s the thing: BitPoint isn’t just any run-of-the-mill network — it’s a decentralized network. Yep, there’s that word again. We haven’t appended it to BitPoint because it’s trendy though: we’ve done so because we passionately believe it to be the fairest and most efficient way of doing business.
Following our crowdsale and token issuance in Q2 2018, we’ll be launching a DAO that is governed by token-holders and powered by Aragon. This means that every decision we take, be it platform development, geographical expansion or revenue sharing will be decided by the people with BitPoint’s best interests at heart — its community. We could make decisions internally and force them upon our users, only we don’t like the taste of layer cake. It’s an outmoded system in our opinion which does little to incentivize or engage its users/customers/token-holders.
Speaking of tokens, yes, we’ve got one, but before you roll your eyes, just hear us out. While most projects use their token to extract as much value from the community as possible, we’re taking the opposite approach. We intend to use ours to create incentive structures that reward holders for interaction with the platform. Everyone is a stakeholder, everyone has a say and everyone benefits. It’s a concept which sounds so simple, and yet its implementation was fiendishly hard until Aragon.
Keeping Up With The DAO Joneses
It may seem ambitious to foment such bold plans when BitPoint is still a nascent company, but we feel as passionately about the concept of decentralized organizations as we do about the concept behind our own project. When Aragon launches in early 2018, it’s going to bring an entire operational framework to the Ethereum blockchain. Governance; fundraising; accounting; voting. You name it, Aragon will facilitate it.
If you’re wondering why any entity would want to migrate all its operations to the blockchain, incidentally, when all of this stuff already exists in the business world, there are a few reasons that spring to mind: liquidity (provided by tokenization), transparency, accountability and — best of all — no paperwork. As an open source, community-driven and incentive-based company, Aragon allows us to tailor a system of governance perfect for our community.
Levering network effects, we aim to create a platform that is greater than the sum of its parts. It may be blockchain technology that makes this all possible, but it is the community who make it happen. Without their participation, even the most ingenious of decentralized projects couldn’t get off the ground. We started this project with the goal of creating a crypto-teller network and along the way discovered a fairer way of doing business. It’s an epiphany that will shape not just our token model, but every major decision we make moving forwards as the BitPoint ecosystem evolves and its incentivized community grows.
