Today is Halloween in the USA, a festival of dead things, so it seems appropriate to write about something that that’s dying slowly: the corporation as the choice organizational form.

Just as knowledge evolves over generations so must the mechanisms that bond people in the socio-economic sphere. Corporations and marketplaces serve to intermediate trust among parties, because until recently we haven’t had a more clever way to deal with opportunism, trust and contracts. Now some academics think we do.

According to them smart contracts based opt-in economies running on blockchains, let’s call them decentralized autonomous organizations (DAO), are the next step in evolution of the organization and the marketplace. If the research insights are correct then corporations, as we know them today, will likely fade away in the coming generations. Here’s why:

#7 Transparency

It’s 2016. We’re able to transact value across the world in seconds. Yet investors, employees and other stakeholders cannot even see what is going on in a corporation at any moment, and are forced to wait for quarterly reports (and trust they are accurate). Blockchain technology allows for near real-time performance monitoring at both high and low levels of an organization.

#6 Globalism

Ever since the end of World War 2 there’s been an emphasis on globalization, as a more economically interdependent world is less likely to start another world war with much more destructive weapons. Today, knowledge workers still have to deal with local entities, but blockchained applications give them the ability to tap into global markets thus strengthening international economic ties.

#5 Equal Access

Today even with all the progress access to many of the best jobs is still guarded by who you know, who you are (race, sex, religion, etc), where you are, or where your degree is from. With DAOs anyone with a internet connected smart phone or laptop can be a part of a DAO and compete on a level playing field.

#4 Complete Contracts, No Trust Needed

Corporations are a collection of contracts between various entities with the corporation managing trust while relying on often overburdened court systems for enforcement. With blockchains and smart contracts, if written and tested properly, market participants can be assured of expected contract resolutions without waiting for years.

#3 Swarm Intelligence

Today, most large enterprises rely on a hierarchy of decision makers. The cost of information dispersion and consensus coordination increases with the number of people and territory involved. Mistakes or inefficient outcomes are not uncommon. DAOs combined with incentivized forecasting allow for a new breed of decision and consensus systems.

#2 Cross-border Transaction Costs

Borders means transnational corporations dealing with a multitude of regulatory regimes created to enforce governance structures on business to safeguard us from bad market actors. Globally distributed blockchains with smart contracts enable anyone to participate in global commerce knowing that governance of a DAO can be built-in thus lowering contract transaction and enforcement costs.

#1 The Ultimate Passion Coordination System

60 years ago it was expected that people would work in the same industry for their entire life. Yet this is not the case today, there is a higher frequency of labor movement, as well as the evolution of the gig economy. More DAOs mean more economic opportunities for more people to purse and self-organize into areas they are passionate about.

What do you think?

So have we convinced you that in the next 10 years your personal business will likely see yourself working with a few DAOs rather than just corporations?

If so, consider helping WINGS out with our coordinated Twitter and FB campaign scheduled for November 18th when we launch our backing campaign to fund development: https://goo.gl/lP4q9a

References

Davidson, Sinclair and De Filippi, Primavera and Potts, Jason, Disrupting Governance: The New Institutional Economics of Distributed Ledger Technology (July 19, 2016). Available at SSRN: https://ssrn.com/abstract=2811995

Davidson, Sinclair and De Filippi, Primavera and Potts, Jason, Economics of Blockchain (March 8, 2016). Available at SSRN: https://ssrn.com/abstract=2744751 or http://dx.doi.org/10.2139/ssrn.2744751

TJ MacDonald, D Allen, J Potts. Blockchains and the Boundaries of Self-Organized Economies: Predictions for the Future of Banking — Available at SSRN 2749514, 2016

Participate in the WINGS backing campaign

A kind reminder that the WINGS campaign is now live and reaching nearly 1500 BTC of support in the first 10 days. Join the community of over 1000+ who will be new WINGS DAO members in 2017! Https://fly.wings.ai