Bitcoin represents the first real-world implementation of a “decentralized autonomous organization” (DAO) and offers a new paradigm for organization design. Imagine working for a global
business organization whose routine tasks are powered by a software protocol instead of being governed by managers and employees. Task assignments and rewards are randomized by the algorithm. Information is not channelled through a hierarchy but recorded transparently and securely on an
immutable public ledger called “blockchain”. Further, the organization decides on design and strategy changes through a democratic voting process involving a previously unseen class of stakeholders called
“miners”. Agreements need to be reached at the organizational level for any proposed protocol
changes to be approved and activated.
How do DAOs solve the universal problem of organizing with such novel solutions? What
are the implications?
We use Bitcoin as an example to shed light on how a DAO works in the
cryptocurrency industry, where it provides a peer
-
to
-
peer, decentralized and disintermediated payment
system that can compete against traditional financial institutions. We also invited
commentaries from renowned organization scholars to share their views on this intriguing phenomenon.