Can Decentralized Autonomous Organizations (DAOs) Be The Solution To Our Financial Problems?
We hear them discussed a great deal. However, do DAOs really have a place in this world? Could they really be the solution to something much larger?
As we proceed forward, technology is advancing at a pace that we never saw before. Some are starting to warn that the threat to jobs is becoming paramount. While much of society seems content to ignore the threat, believing that we will create more jobs than we destroy, some are starting to consider how this can be resolved.
If we are looking at hundreds of millions of jobs disappearing globally, how are people going to make a living? Some opine that Universal Basic Income is the solution. Here is where the government simply provides an amount of money each month to "cover the basics". Unfortunately, even if that plan is financially viable, it puts government, and hence the political winds, right in the middle of one's sustenance.
Could there be a better way? DAOs might offer us some insight.
A New Ownership Structure
Perhaps the way to understand a DAO is to look at Bitcoin. Many proclaim this the world's first DAO. We cannot doubt that it fits within the definition. However, it does not appear to solve the problem we are concentrating upon.
A DAO is similar to a stock in an autonomous organization. It removes the needs for a hierarchical power structure since few humans are needed. The organization, once coded, is able to operate on its own. Periodically, updates are required or some specialized service needed. Nevertheless, for the most part, it runs on its own.
The ownership model is done through tokenization. Each token has a stake in the DAO, encompassing whatever benefits come with holding it. For example, profits could be distributed based upon the percentage each token represents. It can also factor into the governance of the organization.
How does this differ from a corporation? Simply, the absence of people is the key. We do not see automated companies. Instead, automation is owned by corporations. This is what can make them profitable. However, it is tied to the existing financial system which tends to be exclusionary.
For example, all the major Wall Street banks have their proprietary trading systems. These are automated in that they run without human intervention on a daily basis. The software executes buy and sell orders based upon the coding. Of course, all profits are part of the bank. Thus, shareholders technically have a piece of what is generated although it is mixed in with everything else the company is doing.
A DAO related to a specific purpose. This means ownership is tied to some type of automation.
Universal Basic Asset
This is a twist on the universal basic income. What we will focus upon here is a bit different than what most propose. However, as we can see, cryptocurrency offers solutions not previously possible.
One of the keys of eradicating poverty is to get people into a situation of "ownership". The challenge for most people is they own no assets. Without this, it is hard to get ahead. Wealth creation comes from owning assets that can generate incomes in addition to the direct swapping of time for money.
Since most do not fall into this category, DAOs might be the solution. It also could help to remove the government being in the middle of everything.
A concept that people are discussing is the idea of "robotaxis". Basically, this is Uber on steroids. Ridesharing is a huge business and will likely become a lot bigger if forecasts of the cost per mile dropping are correct. Removing the labor from the equation really drives down the cost.
How could this be structured in a way to benefit the members of a community? If we were going to go with a Universal Basic Asset approach, perhaps the taxis are purchased by a local municipality. Each vehicle (or the entire fleet) can be a DAO, tokenized, and given out to all citizens in the community. Thus, each person living there has a stake in the local transportation service. The profits from the operations are paid out to each token holder.
The same idea could be applied to infrastructure. As we proceed forward, digital infrastructure is going to be more important. We know that, as the years pass, we are going to require more bandwidth.
Obviously, the average person is not capable of setting up or running nodes. In fact, the majority do not have the resources to do this. However, if we apply the same DAO concept, we can see how this works.
Perhaps the same municipality sets up a bunch of servers to run some type of digital infrastructure. It could simply tokenize the operation, ensuring payouts from the network operations. Here again, the citizens of the community are able to profit from autonomous operations.
It is a concept that can be applied to anything autonomous.
From Governments To Networks
Of course, we have to be aware this is already in operation. There are many times we are seeing this concept applied. While the term Decentralized Autonomous Organization is not applied, we are seeing the basic tenets of a Universal Basic Asset being constructed.
It is called an airdrop and we see it all the time. While it can be nothing more than a marketing ploy in many instances, there are times we see this happening.
A prime example is the project by the 3Speak team. Here they are developing an entirely new network. The decision was made to drop the mining tokens to all holders on the Hive network. This means that each person who has stake in the latter will be able to mine for the governance token on the former. This becomes a Basic Asset that the individual token holder can benefit from. It becomes Universal since it is dropped to every individual holdings on the Hive blockchain.
Here we are seeing the transition from governments to networks. The community is not based upon the geographic location one is in. Instead, it is applied to the network one is tied to. In a digital world, physical location means nothing. It all comes down to the network.
One of the keys is that people are beginning to enhance their stake through activity. Since much of the world does not have the money to buy into many networks, having the ability to get rewarded is vital. Through the use of applications, we can see how this is going to unfold. Whether it is gaming, social media, finance, or a host of other things people do on a daily basis, individuals are going to be able to spend time increasing their stake. Through the reward mechanism, "ownership" can be achieved.
This naturally feeds into the expansion of new projects. While not all are DAO, they are Digital Organizations (DOs). Having a stake in something like this can be very profitable as those who invested in Facebook, Twitter, or Google know.
To truly move forward, decentralization of ownership needs to take place. This is where the Internet went wrong in its original design. The absence of commerce at the base layer allowed for applications to silo things for their own benefit.
DAOs (or Digital Organizations) can eliminate this. From this principle, we can focus upon different ways that spread ownership out across huge numbers of people. With each new project, the potential exists to decentralize even further.
Ultimately, this could be the solution to the financial problems that plague much of the world.
If you found this article informative, please give an upvote and rehive.
gif by @doze
logo by @st8z
Posted Using LeoFinance Beta
