Decentralised Business, Money, and Economy

As different as businesses can be, from artisan cooperatives to modern-day conglomerates, the key at all times has been the right management. Someone has to manage a business, control it, organise it, this is as fundamental as the planets’ dance around the sun.

That’s what interesting here: whatever forecasts analysts make, they never try to question this core idea. They seem the only solid thing that we can always rely on in our ever-changing world. But suddenly some brainy kid offers an unexpected idea, not that complicated, even obvious, and everyone goes OMG how did we ever manage to survive without it?! This is how the very basics — the business hierarchy, — suddenly started fading away, patinate and show other signs of decay.

And while you are thinking about this intro, we’d love to remind you that in this cycle of articles here at RESERVEUM Max Group, we are working on creating a fair decentralised currency.

Now, let’s get back to decentralising the rest.

So, thousands of years after the development of the economy people found themselves in a situation where it is not necessary to actually manage a business. This system can become decentralised and still work quite well. This is how people came up with another idea on how to use Blockchain — DAO.

A Decentralised Autonomous Organisation — DAO, — is an online organisation that is owned and governed by its participants. At the same time, there are no either horizontal, or vertical hierarchy connections. Participants may know nothing about each other and do the management by anonymous voting for or against some solutions.

Such a decentralised society can make a profit together and distribute it according to the part someone invests into the business process. When there is no hierarchy or controlling body everything is based on the personal responsibility of every participant to the rest of the community and, of course, also on a smart contract algorithm.

Why does the economy need DAO?

When there are structural changes in such areas as life quality, education, and the quality and quantity of communication routes, it is natural for the old schemes to die out. Yes, the majority of companies still keep following the classical patterns and the extent to which they do not come up to the modern-life realia affects the work process, the clients’ feedback, and financial reports.

Here are the main arguments in favour of DAO:

• The classical structure of corporate management cannot provide the required level of business coordination and it is impossible to improve it. It is easier and more effective for every specialist to be responsible for their part only other than having one manager to control everyone and bear the responsibility for the result.
• Smart contracts allow businesses to automatise routine processes and raise their effectiveness. Such complex tasks as accounting, work processes organisation, and managing the whole structure can be maintained by a smart contract with no humans involved at all. It is much more effective and excludes the human factor and also reduces the expenses, so it’s a win-win.
• DAO can use all the advantages of dapps and the Web3 modular structure. Dapps can effectively integrate and merge into constructions with an extended set of functions. Using Web3 improves the system’s stability and allows it to renew some of its parts without messing with the work of others.
• More effective idea implementation. Usually, in more traditional organisations the ideas of ordinary employees are not considered because of no direct connections with the board; meanwhile, in DAO, all ideas are considered and the best ones are chosen in voting.

The opportunities provided by decentralised organisations come up to the requirements of the new economy. They do not depend on a physical location so they are easier to scale up or down and are generally more flexible in the changing conditions, they give their participants equal chances to show their knowledge and experience, and they are open and transparent which meets the requirements of modern consumers.

Today, there are hundreds of DAO in such areas as IT, coding, financial services, investment, media, etc. It will most likely take just several years for this organisation form to spread — so obvious are the advantages.

What else can be decentralised?

The decentralised business structure will most likely not spread into all of the industries just because of their specific features, but it will become more or less of a norm. What can actually become fully decentralised is the money system.

If you are not very familiar with the topic, we would recommend our article called “FED — the Structure of the World’s Biggest Central Bank”. It will help you find out how the current money system works and what is so wrong with it.

Centralised finances are only good for those who manage them, while the average users get more problems than benefits, like inflation and crises. Still, its most important functions — a measure of savings and settlements, — are not fulfilled because the money is constantly losing its value.

There are several reasons for that. First of all, there are always some people who have access to the production, storage, and distribution of such a resource as money, and they will always misuse their authority. Secondly, despite their centralisation, money and economy are not synchronised and interact with each other without a system. No one knows how many of which products should be produced so there are always overproduction and deficit; no one knows how much money the economy needs for all the processes to function properly, that’s why there is still such a thing as economic inequality.

Within a democracy, this system will not be able to function forever. Society becomes more and more independent and demanding, and the money system has to be changed sooner or later. The most likely alternative is going to be decentralised money which could become a solution to all of the current problems.

A decentralised digital currency managed by an algorithm — a smart contract, — that is fully protected from inflation and may even turns out to be deflationary. This means that the money will not lose value over time but gain it, the savings will have higher capitalisation, and the prices for goods will stay on the same level or may even become lower.

What would it lead to?

So, we have all the reasons to believe that in the next years, the business and money system can be decentralised, and the next big step is to decentralise the economy too.

It may seem impossible, but Blockchain is capable of that too. A smart contract can manage a huge number of processes at the same time, including money distribution, production volume regulation for different industries, as well as demand and supply synchronisation.

We learnt these and other opportunities provided by smart contracts while creating a protocol for a fair decentralised currency RESERVEUM Max. The stablecoin is showing great results, and the Reserveum Max team believes that in the next several years it may replace fiat money.

But so far, the development process is not finished yet, so we are open to your brilliant ideas on creating the currency of the future. We would also like to thank everyone who takes an active part in our project. We collect all of your suggestions and choose the best ones.

According to the analysis group findings: reserveum.org