Designer, writer, and philosopher.
Designer, writer, and philosopher.
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Here’s to the next big thing of 2022!
Nowadays, we watch our favorite movie with an app, we order our food with an app, we communicate with our loved ones with an app, we run important business meetings with an app, and we practice mindfulness with an app.
Software is eating the world. We’ve seen it with the dominance of companies like Netflix, Facebook, Uber, Airbnb, and many more. It’s safe to say that our lives have almost completely depended on the digital world and it will be hard to imagine how would it look like without it.
Shaan Puri, a Twitter persona, said that the metaverse is the point in our lives where our digital lives are valued higher than our physical values. Do you think we’re already on that point?
A big part of what makes this a reality is the consequence of the next iteration of the web, called Web3. It started with cryptocurrencies like Bitcoin, to ICOs, blockchain-based apps and now we’re about to see DAOs or decentralized autonomous organizations.
Here’s how would I explain DAOs to my 12-year-old cousin.
According to Ethereum.org,
DAOs are an effective and safe way to work with like-minded folks around the globe.
Think of them like an internet-native business that’s collectively owned and managed by its members.
They have built-in treasuries that no one has the authority to access without the approval of the group.
DAOs are basically internet communities that operate like a company. They are completely built digitally with the power of software, meaning they aren’t like Facebook, Google, or Amazon, which rely on their existence in the physical world, despite having software offerings as their main platforms.
DAOs are also decentralized, unlike their counterparts which rely on a central authority. This means that these so-called DAOs are governed by all the members and no single person has the power to make a decision.
In addition, traditional corporations are incorporated and operated with lawyers, corporate registrars, executives, and boards of directors.
DAOs don’t need those.
Perhaps the most unheard example of a DAO is Bitcoin itself. Bitcoin doesn’t have a central authority, it runs on blockchain technology, and it relies on the trust of the community to keep itself operating.
You can also imagine DAOs like the clubs you will join in high school or college. For instance, a club that aims to normalize talking about sensitive topics like human rights or gender pronouns.
Now, this club has a specific purpose right?
Clubs have their own treasuries, members, and core team. DAOs are exactly like that. The difference is that DAOs are built entirely on top of software living on the internet and your computer called blockchain and smart contracts.
Utopia Labs, a platform that aims to be an operating system for DAOs and crypto companies, described DAOs as,
Digital cities!
These digital cities are built on top of two major technologies, blockchain and smart contracts.
Blockchain is simply a network of computers located all over the world that connect with each other like nodes. When you think of the term blockchain, keep in mind that it makes the whole concept of decentralization possible.
Why? Decentralized means there’s no central point, which also means the organization is distributed all over the world through every member. Destroying one location doesn’t kill the DAO because its existence is in the code or software, which can be accessed globally.
Then we have smart contracts, which basically are a piece of code that executes something once something happens. It’s what enforces crypto transactions that happen between people in the network or in the DAO.
For instance, when using MetaMask or Coinbase wallet to pay someone in Ethereum, behind the scenes, there are smart contracts that make the transaction happen.
To understand the anatomy of a DAO from a technical perspective, read here.
So, now you know that DAOs run on blockchain and smart contracts, which are basically software. You can think of these organizations as companies that run entirely through code. In addition, whenever you think of DAOs, think of these:
They are primarily a community with its own mission
They are perceived as a club just like the ones you’ll join in high school or college
They're entirely digital or internet-native, meaning their existence is purely in the metaverse
They’re seen as companies or organizations because they can collect, manage, and distribute capital that drives DAO’s mission, operations, and innovations forward. Unlike traditional corporations, DAOs are much less likely to be corrupted, political, and self-serving. They’re more mission-driven, innovative, and balanced.
The power and control among DAOs rely on their people or members. Unlike traditional corporations, it relies on the CEO, board members, and/or the majority shareholders.
Are DAOs going to replace traditional corporations?
Not entirely. Here’s one thing I can say, not everything has to be a DAO. Some organizations are better off as a traditional corporation and some are better off as a DAO. We’re most likely going to see both types complement each other.
If we’re going to point out what makes DAOs attractive and powerful, just think of billion of dollars getting lost or being wasted by power-hungry and maniacally greedy executives.
If you are part of DAO, you are most likely to:
Care more about the mission or technology than money itself
Favor democracy as long as there are restrictions and screening
Side on innovation aspect as you believe in building great products
And according to Antler Insights’ newsletter, DAOs also claim to be:
Permission-less: A broader base of people can participate
Autonomous implementation: Decisions are enforced via self-executing smart contracts (software or code) versus human intervention
Censorship Resistant: DAO decisions cannot be censored, meaning they’re transparent
DAOs function on logic and rationality, meaning there is less of an emotional or irrational intervention. Humans are known to be emotional beings, which heavily impacts business decisions and operations, which often results in crazy consequences.
DAOs are defining the future of wealth management, employment contracts, home leases, business deals, venture capital, and many more!
Now, what does this mean for an average Joe? What does this mean for all of us? More innovations? More mission-driven goals? A fair world? Expedited access to a Utopian society?
If everything goes well, all of them!
Let me know your thoughts or if you want to discuss it! Hoping you enjoyed this article. Feel open to hit me up down the comment section below.
Original post:
https://medium.com/utopian/daos-explained-to-a-12-year-old-c1b6a8dafd42
References:
Here’s to the next big thing of 2022!
Nowadays, we watch our favorite movie with an app, we order our food with an app, we communicate with our loved ones with an app, we run important business meetings with an app, and we practice mindfulness with an app.
Software is eating the world. We’ve seen it with the dominance of companies like Netflix, Facebook, Uber, Airbnb, and many more. It’s safe to say that our lives have almost completely depended on the digital world and it will be hard to imagine how would it look like without it.
Shaan Puri, a Twitter persona, said that the metaverse is the point in our lives where our digital lives are valued higher than our physical values. Do you think we’re already on that point?
A big part of what makes this a reality is the consequence of the next iteration of the web, called Web3. It started with cryptocurrencies like Bitcoin, to ICOs, blockchain-based apps and now we’re about to see DAOs or decentralized autonomous organizations.
Here’s how would I explain DAOs to my 12-year-old cousin.
According to Ethereum.org,
DAOs are an effective and safe way to work with like-minded folks around the globe.
Think of them like an internet-native business that’s collectively owned and managed by its members.
They have built-in treasuries that no one has the authority to access without the approval of the group.
DAOs are basically internet communities that operate like a company. They are completely built digitally with the power of software, meaning they aren’t like Facebook, Google, or Amazon, which rely on their existence in the physical world, despite having software offerings as their main platforms.
DAOs are also decentralized, unlike their counterparts which rely on a central authority. This means that these so-called DAOs are governed by all the members and no single person has the power to make a decision.
In addition, traditional corporations are incorporated and operated with lawyers, corporate registrars, executives, and boards of directors.
DAOs don’t need those.
Perhaps the most unheard example of a DAO is Bitcoin itself. Bitcoin doesn’t have a central authority, it runs on blockchain technology, and it relies on the trust of the community to keep itself operating.
You can also imagine DAOs like the clubs you will join in high school or college. For instance, a club that aims to normalize talking about sensitive topics like human rights or gender pronouns.
Now, this club has a specific purpose right?
Clubs have their own treasuries, members, and core team. DAOs are exactly like that. The difference is that DAOs are built entirely on top of software living on the internet and your computer called blockchain and smart contracts.
Utopia Labs, a platform that aims to be an operating system for DAOs and crypto companies, described DAOs as,
Digital cities!
These digital cities are built on top of two major technologies, blockchain and smart contracts.
Blockchain is simply a network of computers located all over the world that connect with each other like nodes. When you think of the term blockchain, keep in mind that it makes the whole concept of decentralization possible.
Why? Decentralized means there’s no central point, which also means the organization is distributed all over the world through every member. Destroying one location doesn’t kill the DAO because its existence is in the code or software, which can be accessed globally.
Then we have smart contracts, which basically are a piece of code that executes something once something happens. It’s what enforces crypto transactions that happen between people in the network or in the DAO.
For instance, when using MetaMask or Coinbase wallet to pay someone in Ethereum, behind the scenes, there are smart contracts that make the transaction happen.
To understand the anatomy of a DAO from a technical perspective, read here.
So, now you know that DAOs run on blockchain and smart contracts, which are basically software. You can think of these organizations as companies that run entirely through code. In addition, whenever you think of DAOs, think of these:
They are primarily a community with its own mission
They are perceived as a club just like the ones you’ll join in high school or college
They're entirely digital or internet-native, meaning their existence is purely in the metaverse
They’re seen as companies or organizations because they can collect, manage, and distribute capital that drives DAO’s mission, operations, and innovations forward. Unlike traditional corporations, DAOs are much less likely to be corrupted, political, and self-serving. They’re more mission-driven, innovative, and balanced.
The power and control among DAOs rely on their people or members. Unlike traditional corporations, it relies on the CEO, board members, and/or the majority shareholders.
Are DAOs going to replace traditional corporations?
Not entirely. Here’s one thing I can say, not everything has to be a DAO. Some organizations are better off as a traditional corporation and some are better off as a DAO. We’re most likely going to see both types complement each other.
If we’re going to point out what makes DAOs attractive and powerful, just think of billion of dollars getting lost or being wasted by power-hungry and maniacally greedy executives.
If you are part of DAO, you are most likely to:
Care more about the mission or technology than money itself
Favor democracy as long as there are restrictions and screening
Side on innovation aspect as you believe in building great products
And according to Antler Insights’ newsletter, DAOs also claim to be:
Permission-less: A broader base of people can participate
Autonomous implementation: Decisions are enforced via self-executing smart contracts (software or code) versus human intervention
Censorship Resistant: DAO decisions cannot be censored, meaning they’re transparent
DAOs function on logic and rationality, meaning there is less of an emotional or irrational intervention. Humans are known to be emotional beings, which heavily impacts business decisions and operations, which often results in crazy consequences.
DAOs are defining the future of wealth management, employment contracts, home leases, business deals, venture capital, and many more!
Now, what does this mean for an average Joe? What does this mean for all of us? More innovations? More mission-driven goals? A fair world? Expedited access to a Utopian society?
If everything goes well, all of them!
Let me know your thoughts or if you want to discuss it! Hoping you enjoyed this article. Feel open to hit me up down the comment section below.
Original post:
https://medium.com/utopian/daos-explained-to-a-12-year-old-c1b6a8dafd42
References:
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