Will The DAO Change The Concept Of OwnershipsteemCreated with Sketch.

in busy •  5 months ago 

Tokenization is changing a lot of things. At the core of it is how we think about some things we took for granted.

Our business world is built around the concept of ownership. To be highly successful, one needs to own things. This can be in the form of a small business or ownership in a public company. Those who own businesses tend to do the best.

Unfortunately, there is a down side to this. As we traveled down the path of our present system, we saw the emergence of a corporatocracy. More of our economy is under the control of the largest corporations. With each new innovation, they just get stronger. Having money and political clout makes it easy to set aside any challengers.

Tokenization is changing the game. When done on a decentralized platform, a utility token does not denote ownership as much as the ability to operate. A token has a monetary value, this providing the ability to transfer value from one party to the next.

Digitization is changing our concept of ownership. A couple decades ago, people bought their music. Depending upon the time period they bought a record, cassette, or CD. This contained 8 or 10 songs and was "owned" by the person who made the purchase.

Today, we see a different model. Pandora and Spotify offer millions of songs for a monthly fee. There is no ownership, only use. One does not need to own to enjoy. The same switch was made with video. Few people buy movies anymore. Instead, they opt for the Netflix/Amazon model.

We see this happening in many different industries. Uber ushered in the app to transportation as a service. AirBNB did the same thing with lodging.

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Could we see blockchain create a similar shift with how we establish companies in general?

The idea behind the DAO is that nobody is running it. It is an autonomous organization that operates according to the coding. Those who have a stake in the "corporation" are able to vote in certain guidelines that are programmed in. At times there are certain activities that require human intervention and those can be contracted out. However, much of the operation if fully autonomous.

This obviously reduces the amount of corruption. Being on a blockchain, all transactions are transparent. Also, unless the code is changed, the activity is consistent based upon the programming.

Another switch is the idea of ownership. There are a few projects on Steem, as an example, where the goal of the project is to be a DAO. @threespeak is one such opportunity.

The team behind that project already stated their intention to get things up and running, automate it as much as possible, get their seed money out plus a small profit, then have the entire project be a DAO.

Of course, I would believe the initial individuals involved would retain a significant stake in the system via the hodling of tokens since they are also users of the platform.

The idea that nobody owns the system is a tough one to get our minds around. It is so new that, to most of us, it is a totally foreign concept. I guess the closest we get is the concept of a public road. Nobody owns the road even though we all get to use it.

Bitcoin could be considered the first DAO although few refer to it that way. Nobody owns the Bitcoin network. It is running on computers all over the world, an activity where most are rewarded. Anyone is free to utilize the network to transfer value. Hodling tokens does not denote ownership of the network but, rather, is simply an accumulation of the currency used to transfer. The system keeps operating on its own without fail. Certainly, there are times where coders will do updates and people are working on layer 2 solutions, yet the core blockchain is unowned.

Yet somehow, this is worth a couple hundred billion dollars.

The biggest shift that I see taking place is the mindset behind launching the project. Under the present system, the goal is often to maximize the money made. If this is not the case initially, it soon enters the picture. This is especially true if a publicly traded company buys it. Their goal is continual growth, something that is driven home with each quarterly reporting.

Tokenized systems are concerned about the health and growth of the network. In this instances, there are not profit and loss statements. People are involved from all over the world, usually without knowledge of who the others are. Projects are tied to the network without requiring permission. Success at any level helps everyone who is involved.

Will this change the idea of companies that are privately held by just a few individuals? Could there be a time when we turn away from those that fall into this category? Might we opt to use an application that is either a DAO, or part of one, while rejecting that platforms that are owned by individuals or companies?

From my own experience, I see the shift in my mind when looking at projects that are centralized versus decentralized. Those that are not, at a minimum, working towards decentralization, hold little interest to me. I prefer those that are opening things up and trying to change the paradigm we are operating under.

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My feeling is that we are going to see a time when projects are started with the intention of turning them into DAOs as soon as possible. It would not be surprising to see those that are set up using the traditional ownership model struggling in areas such as funding. The issue of trust is going to keep becoming a bigger part of the equation, something that blockchain handles fairly well.

While tokens can represent ownership, we could well see more of them take on the utility aspect. Ownership is something important in our minds right now because of the present system we operate within. However, how important is ownership when most are concerned about the ability to use? In the end, I do not think it carries much weight.

If all cars were self driving and one could get one whenever he or she needed, is there any point to ownership? Let us say that Tesla offered out a token for its autonomous fleet. Fast forward to a time when all the cars are made by robots with little to no human interaction. The robotic systems are monitored by AI, further reducing the need to people.

The entire company could be a DAO. My holding of the Tesla token would provide me with access. Naturally, since it is trading on markets, the price would move up and down. However, at the core, that would just alter the number of rides I could get for my tokens (and whatever other services the token could access).

Any decisions to be made pertaining to expansion of the company could be done by the voting of the token hodlers. On blockchain, it could be ongoing with the different proposals up for vote all the time. People would add and remove votes as they see fit. If special projects were required, this could be voted upon and funded through these proposals.

We already see some of this taking place around the crypto industry. I would expect it to keep expanding the more innovation we see coming on line. Once people get a taste of how powerful this can be, few will want to return to the present model.

Automation is coming, we are well aware of that. The challenge society has is these technologies being in the hands of a few mega corporations that are primarily owned by a small part of the population.

DAOs can help to alter this. As we see crypto spread throughout the world, people will then have resources to tap into these different companies. It will naturally be a shifting process since people will continually be swapping tokens. Nevertheless, the utility of the token is going to direct where people go in most instances.

In this end, this could be a major part of the paradigm shift we see coming.


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Upvoted 👌 (Mana: 5/10)

One of the best article on DAO. I am making a DApp for trade simulations and working to make it on DAO model.

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