Much has been written on the topic of DAOs and their benefits. I wanted to take a moment to outline what I believe to be the potential downsides: I believe that DAOs have the potential to become extremely dangerous. In fact, over the next few years, DAOs may actually prove to be significantly more dangerous than the threat of “General AI.”

The Power Of DAOs

The power of DAOs comes from like-minded people joining together to accomplish a common goal, or represent a common set of interests. This is obviously a good thing, with many potential positive benefits.

The real problem stems from the nature of human beings. We are fundamentally tribal: We want to get together and form groups which share common interests. Of those interests, nothing is stronger than “identity based” associations along the lines of race, gender, social class, educational attainment etc.

In other words, if given the choice, a large proportion of humans would choose to organize along racial and gender lines. We are only prevented from doing so by the restrictions of physics, time, energy and cost (as well as social barriers). DAOs make such groups not only possible to form, but easy and natural.

As DAOs gain traction and spread, I am concerned we might witness a world where everyone chooses to join Decentralized Autonomous Organizations purely based on their gender and race. And when that happens, a truly extraordinary threat may emerge.

The Dangers of Checking Out

If everyone on earth is able to “check out” of their local heterogeneous community and “check in” to a homogenous world where they are only associating with others of their same race, gender, religion or belief system - we may soon see warring factions. Groups which wield significant talent, effectively run their own “Central Banks” and host members placed across the industry, financial and government institutions.

Such decentralized organizations might prove to be extremely effective operators, at waging war in cyberspace or in person…far more effective than any normal human institution, government, state or corporation. They would become very powerful, and there would be little that anyone could do to prevent them from being formed and operated.

The members of these DAOs would be significantly more loyal to these groups than to the institutions, corporations or governments which members belong to.

Pirate DAOs

I can see also the potential for the formation of “Pirate DAOs” which operate effectively like independent pirate kingdoms, pooling the talents, placement and resources of their distributed membership into a highly effective set of “information weapons” which can be used to “Attack” and “Raid” the physical world.

While I love the idea of DAOs and the innovation occurring in the space: Make no mistake, there are great dangers hidden in the nature of DAOs.