The third piece, Virtual Currencies Bill, is set to regulate the tokenised value flow. This bill will without a doubt get the most attention because it directly deals with assets and cryptocurrencies. Brokers, exchanges, wallet providers, advisors, wealth managers, and other human actors fall under this piece of regulation.

However, I suppose it’s not human actors who will create the most far-reaching consequences of this new regulation.

Legally capable DAOs (distributed autonomous organizations) are, on one hand, only a part of what the Maltese legislators are bringing in today; on the other hand, this phenomenon may become disproportionately more influential than cryptocurrencies, blockchain or the entire global finance itself.

Eventually, DAOs development may lead to a restructuring of the most shameful aspect of today’s civilization: human management systems (hierarchies, democracy, etc.), which still fundamentally differ little from those used by primates or wolves, being heavily influenced by instincts and hormonal background.

Let’s take a closer look at what it could technically mean when some “Technology Arrangements” become real legal entities.

Programmable Legal Entities will Become Way More Complex than Incumbent Corporate Structures

Here’s what an ordinary human-managed organisation structure may look like; it rarely gets more complex than this:

In incumbent structures, every new functional node or a specific organisational “patch” is associated with high fixed costs and an additional possible loss of stability.

Unlike that, human-less or semi-automated software-based legal entities may develop to a much higher degree of complexity because a DAO can recursively co-own and co-manage other DAOs with ease and next to zero maintenance costs. Such structures will keep getting more and more complex with time as administrators will add patches to solve immediate problems, being naturally too lazy or short of time to reorganise and simplify. Since distributed apps are often focused on compatibility, DAOs will be connected to multiple services such as Colony, Aragon, district0x, etc. Possible inefficiencies and conflicts between layers will be solved with even more bridges and fixes.

Will that be a problem? Most probably not. Unlike structures that require humans, hardware and software can be build up into towers of patches and add-ons, and the system may still function great. Here’s an artifact at the Mercedes-Benz museum in Stuttgart.

A typical modern car is still essentially nothing more but a few thousand non-principal improvements, add-ons, and patches to this one hundred years concept. Despite having countless number of details, modern cars run just fine — in fact, substantially better than the original platform.

Complex Meta-DAOs can Defeat Strong Enemies of Reasonable Management

Quantity and complexity of components often eventually turn into a new system quality. A transition from micro to macro may be gradual and shockless. The world will be more and more reliant on the use of software entities to control the behavior of real-world resources. Most tasks share a similar structure: multiple parties come together to coordinate their activities in order to achieve a common goal, so a lot of research will be invested into the evolution of competing entity mechanics and new processes of coordination. A new type of logic will emerge to approximate reasoning, information granulation, linguistic computing, and other management related disciplines.

But will it lead to loss of control by the original beneficiaries? Yes and no — it depends what we mean by “control”. The vague definition is “to make things happen the way I want”; however, the problem is that people make most “decisions” only to activate (satisfy) neurons of the brain related to pleasure.

The strong enemy of reasonable management in particular and the progress in general is a primeval mix of conformism and conservatism. Conformism is biologically justified: even if you understand that you are being manipulated, you are unknowingly obeying. Conservatism (backwardness) is also a scary imminence being innate for a disproportionately large fraction of the population.

Sensitivity and vulnerability of “conservatives-in-mind” is a consequence of a prevailing negative attitude. “The ugly” always gets the highest priority in a conservative brain because any deviation from “the norm” is a signal about a problem that needs to be fixed. This thinking mechanism seems to have been anchored by evolution over the long 2.5 million years of the Pleistocene, when maintaining the old order of things, circular defense, and constant vigilance gave more advantages in the struggle to survive than, for example, ingenuity. The Pleistocene ended a mere 12 thousand years ago. About the same time humans domesticated dogs — live alarms — but the genes responsible for the ability to alert at each rustle have not disappeared.

Here’s our main assumption: DAOs can do exactly what dogs have done for us 12 thousand years ago— take care of the conservative part of management.

But how?

And how do we know that problem preventing and solving will be a much more popular application for DAOs than discovering new frontiers? And, regardless of preconceived evaluation by humans, why would DAOs be better at defence rather than offence?

Of course, no one knows a thing for sure as of yet. At this point in time, it can only be computer simulated; no actual experiments are possible.