Blockchain Revolution

participated in a crowdfunding campaign. The shareholders provide a mission
statement, say, to maximize profit lawfully, while treating all stakeholders with
integrity. Shareholders could also vote as required to govern the entity. As opposed to
traditional organizations, where humans make all decisions, in the ultimate distributed
organization much of the day-to-day decision making can be programmed into clever
code. In theory, at least, these entities can run with minimal or no traditional
management structure, as everything and everyone works according to specific rules
and procedures coded in smart contracts. There would be no overcompensated CEO,
management, or corporate bureaucracy, unless the entity decided to hire and build
one. There would be no office politics, no red tape, no Peter Principle of the
Dilbertian enterprise at work, because technology providers, open source
communities, or enterprise founders would set the software’s agenda to execute
specific functions.
Any human employees or partner organizations would perform under smart
contracts. When they do the job as specified, they are instantly paid—perhaps not
biweekly but daily, hourly, or in microseconds. As the entity wouldn’t necessarily
have an anthropomorphic body, employees might not even know that algorithms are
managing them. But they would know the rules and norms for good behavior. Given
that the smart contract could encode the collective knowledge of management science
and that their assignments and performance metrics would be transparent, people
could love to work.
Customers would provide feedback that the enterprise would apply
dispassionately and instantly to correct course. Shareholders would receive dividends,
perhaps frequently, as real-time accounting would obviate the need for year-end
reports. The organization would perform all these activities under the guidance and
incorruptible business rules that are as transparent as the open source software that its
founders used to set it in motion.

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Welcome to tomorrow’s distributed autonomous enterprise (DAE), powered by
blockchain technology and cryptocurrencies, where autonomous agents can self-
aggregate into radically new models of the enterprise.
Before you say that this all sounds impractical, pointless, or something from sci-
fi, consider the following. Using tokens, companies such as ConsenSys have already
issued shares in their firms, staging public offerings without regulatory oversight. You
could legally record the ownership of privately held corporations and transfer those
shares to other persons on the blockchain. Your share certificates can pay dividends
and confer voting power. That said, your new “blockcom” is distributed; it doesn’t
exist without jurisdiction, but your shareholders can live anywhere. Imagine a similar
mechanism to issue debt in the form of bonds, either private corporate bonds or
sovereign bonds, essentially creating a bond market. The same logic applies to
commodities—not the commodity itself but a note that corresponds to the commodity,
similar to how the Chicago Mercantile Exchange or the global gold market work.
But don’t think of securities as you currently know them. Imagine a global IPO
with 100 million shareholders each contributing a few pennies. It’s not unthinkable
that management and governance could occur on a massive scale, with millions of
people having voting shares. At last, investors at the bottom of the pyramid could