the world is changing rapidly and the
internet is fast entering a new
technological era as web 2.0 gives way
to an emerging set of blockchain
technologies this next generation of
Internet technologies built on the
blockchain offers many interesting new
technological economic and social
innovations such as digital currencies
distributed Ledger's blockchain IOT
systems that will transform many
industries from finance and insurance to
energy and cybersecurity but probably
the extraordinary thing about this next
generation of the Internet
built on the blockchain is that it is as
one commentator noted an institutional
technology at the heart of social
organisations and all forms of
institutions is a question of how we
work together by exchanging value within
a trusted environment the blockchain is
technology that enables automated trust
and the automated frictionless value
exchange this capacity to automate the
basic workings of social institutions
coupled with increased interconnectivity
means that we increasingly have the
technological means to create massive
organizations that are truly distributed
and automated something we have never
seen before and whose potential is only
really limited by one's imagination this
potential of the blockchain to
revolutionize human social institutions
is most clearly demonstrated in what are
called distributed autonomous
organizations that give us a glimpse
into the future although truly
autonomous decentralized organizations
are something new they can also be seen
as just one more step in a millennia-old
process of institutional evolution a
process in which we have gone from
organisations based fully upon the
specific characteristics of their
leaders within hierarchical structures
to the modern bureaucratic organization
to today's platform economy where we
have moved into semi distributed
organizations where businesses operate
platforms where the rules are executed
by computer code automatically
in our current platform economy that has
been built on web 2.0 technologies over
the past decade organizations are a
hybrid a distributed automated platform
and centralized business organization
managed by people platforms like YouTube
Alibaba WeChat upwork or uber represent
a combination of both centralized
digital platform operated by a private
business and distributed user-generated
systems built on the platform by
hundreds of millions of users however
things are changing fast at present and
the web 2.0 technology that created
these platforms is giving way to a new
era in web technology with the rise of
the blockchain blockchain technology
offers the possibility to
disintermediate these platforms by
creating fully distributed systems of
organization without need for a
centralized organization supporting the
platform with the blockchain we now have
the technology to create truly
distributed organizations at a global
scale something that we previously did
not have a decentralized autonomous
organization also called Dao is an
organization that is run by rules that
are created by their members through a
consensus process and then written into
a set of contracts that are run via
computer code thus enabling the
automated management of a distributed
organization on a more technical level a
Dao is an organization that is managed
through rules and coded in smart
contracts and run on the blockchain dows
our online platform communities with
their resources organized according to
rules agreed in advance and set out in
its code
Dow's are an open source software
capable of modifications remember
consensus they are currently made
possible by the development of aetherium
aetherium is a public blockchain which
works as a decentralized virtual machine
for executing peer-to-peer contracts
Dow's are essentially a set of complex
smart contracts that combine to form a
set of rules that manage the operations
of a group of members and their
resources
distributed organizations are based on a
few core principles to their design
which are ultimately trying to support a
self-sustaining system of organization
through local feedback loops instead of
having formal management structures
monitoring and coordinating the
organization from a central point
decentralized organizations work through
signaling systems which are distributed
feedback loops as means for aligning the
individual with the group distributed
organizations tackle a problem by
creating an infrastructure of
cooperation done through the local
interactions between members and
signaling systems which are designed to
create a self-organizing system a good
example of one such signaling system
would be the feedback a buyer leaves for
a seller on eBay thus creating a signal
to others about the sellers
trustworthiness via only peer-to-peer
interaction at the heart of these
distributed organizations is the idea
that groups are about value as measured
by some form of a token with distributed
Ledger's we can create markets out of
tokens that represent whatever value
system the organization is based around
it is this value token system and market
mechanism that are at the heart of the
organization they regulate the system
and define any one person's position
within the group these distributed
organizations aim to be meritocratic
that is to say a person's position in
the organization is based upon the value
they have contributed as measured by the
other members that they have interacted
with their value and corresponding
reputation that they have received
through their interaction with other
members defines their status within the
community with all of this being encoded
as tokens on the blockchain distribute
his organization's try to draw upon the
intelligence of many people by drawing
upon their specific local knowledge they
try to avoid situations where people
become overly influenced or persuaded by
any highly influential member they try
to harness a diversity of perspectives
from all the members
distributed organizations try to embody
the process of evolution in their design
similar to the evolutionary process that
is built into our market economy
distributed organizations work through a
process whereby members create a stock
of new ideas decisions or initiatives
and then members essentially invest
their tokens into those that they
believe most viable and receive rewards
if the initiative is beneficial to the
organization thus mimicking the process
of evolution where new varieties are
created and selection is performed based
upon their contribution to the whole
organization distributed autonomous
organizations are very much in their
infancy they are still just experimental
not only do we lack the actual finished
software solutions we in many ways still
lack some of the basic science required
to understand the full dynamics through
which self-organizing social systems can
work in a stable safe and sustainable
fashion there are many things that can
go wrong with badly designed social
systems one of the first large-scale
autonomous distributed organizations was
recently hacked at the cost of millions
of dollars we are still in the
experimental phase of trying to
understand exactly all the parameters
and dynamics that are needed to make a
social system self-regulating and then
building these into the software this
being said a number of distributed
systems for organizational management
already exist such as back feed or
colony being the most often cited
examples although such systems are still
experimental in nature their potential
should not be underestimated and they
will only grow as the underlying
technology develops and our
understanding of distributed
self-organizing systems matures the
blockchain and new distributed models of
governance can play a major role in
providing the trust infrastructure the
platforms and off-the-shelf
organizational solutions to massive
social systems the type that would be
required to develop functioning global
institutions
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