The blockchain is being looked at as a great way to transform finance as we know it to this very day. Although there is a genuine use case for distributed ledger technology in the monetary system, its use cases transcend the borders of payments and settlement. The Ethereum developers are very excited about their solution to build a democracy on the blockchain, thanks to the Decentralized Autonomous Organization concept.
The Decentralized Autonomous Organization – or DAO
Most people have taken a keen interest in Ethereum thanks to the option of using automated smart contracts. A smart contract acts as an agreement between two or more parties, which will verify all of the provided data and rule on whether or not contract conditions are met. Unlike most other types of agreements, a smart contract does not require human input once it has been set up.
But there is a problem with most of these smart contracts, as they are still created and owned by humans. As a result, these contracts are not completely autonomous, but only up to a certain extent. The Ethereum ecosystem is unbiased regarding biotics, robots, or any other type of species using smart contracts, and it is only normal to try and take things one step further.
One way to tackle this problem is by introducing a new breed of organization that is both decentralized and democratic, yet only “exists” on the blockchain. However, that does not mean this organization is incapable of doing anything, as it would grant access to the same toolset regular accounts offer.
Imagining such an organizational form without a central manager would be all but impossible, but the Ethereum developers have come up with a way to change this concept as well. After all, there is no point in a decentralized organization if there is centralized leadership in the form of one person making all of the important decisions.
A decentralized autonomous organization on the Ethereum blockchain has an owner – albeit not in the traditional sense – who can decide upon voting members to the organization. Every eligible member has the right to make proposals, by using an Ethereum transaction to execute a contract or send Ether. Other members can then side with the proposal, or reject it. After a certain amount of votes have been registered, the proposal can be executed.
As mentioned earlier, there is a way to still have an owner in the decentralized autonomous organization, but there is a twist. For example, the owner can change ownership to no one, or to a smart contract. These DAO’s can be as simple or complicated as the users want to make it. Contracts can even be the owner of different contracts, who own other contracts, et cetera.
Build Anything You Want On The Ethereum Blockchain
The interesting bit about Ethereum and its blockchain is how the software solutions can translate into real life use cases. Anyone who has ever dreamed of creating their company or organization can now do so with the Ethereum blockchain. Getting involved in establishing DAOs is an excellent way to revolutionize the world as we know it, even outside of the financial world.
On the DAO portion of the Ethereum website are several contract examples of how a decentralized autonomous organization would look like. Whether one wants to have a house of representatives, liquid democracy, stakeholders, or simply deploy a very sophisticated and versatile contract, everything you need to know to get started can be found there.