Blockchain Revolution

HACKING YOUR FUTURE: BUSINESS MODEL INNOVATION
As for a company managed by software agents, Ronald Coase must be high-fiving up
there somewhere in Economists’ Heaven (although some might dispute that such a
place exists). Remember the reverse of Coase’s law? A corporation should shrink until
the costs of transactions inside are less than the costs of transactions outside its
boundaries. As technology continues to drop costs in the market, it’s conceivable that
corporations could and should have very little inside—except software and capital.
Think about it.
To begin, the cost of “search” continues to drop as new agents have the ability to
conduct three-dimensional searches of the World Wide Ledger of everything
commercial that exists or has existed. So no need for a corporate library, information
specialists, HR search specialists, or the myriad other professionals involved in
acquiring pertinent information to run a business.

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Second, smart contracts would radically reduce the costs of contracting, policing
contracts, and making payments. No longer paper, these programs could formulate
their terms through a series of templates; bargain, accepting or rejecting terms and
conditions based on rules and extensive information collected from external sources;
formulate self-enforcing policies; determine when performance conditions have been
met; and execute transactions.
Third, the cost of coordination of all these resources outside the organization
could be trivial—measured in the energy to power the servers hosting the enterprise
software. As for managing humans, organizations, and factories hired by the
enterprise, the enterprise has no need for bureaucracy. With the new platform we can
imagine a new organization that requires little or no traditional management or
hierarchy to generate customer value and owner wealth.
Finally, the costs of establishing trust would approximate zero. Trust does not rest
with the organization, but rather within the functionality, security, and auditability of
the underlying code and the mass collaboration of the countless people securing the
blockchain.
How would you go about designing a distributed autonomous enterprise? Such an
entity could have rich functionality—agents executing ranges of tasks or more
broadly business functions all based on a preapproved charter. Individuals,
organizations, or collectives of potential shareholders or users will design them by
defining the following: