Blockchain technology is best known for producing one thing, cryptocurrency. The most popular is bitcoin but what all cryptocurrencies have in common is that they do not rely on a central bank to manage the money supply or verify transactions. In the blockchain, information is shared equally and openly to everyone in the network. Users remain anonymous thanks to its advanced cryptography and they can interact with others without a third-party middleman.
At even grander scale, blockchain technology allows communities to organize with free association and an absence of hierarchy.
Ariel Deschapell, a content manager for a blockchain real-estate company thinks that decentralized, autonomous communities can create an environment open to any set of rules or leadership one chooses.
The absence of a central authority figure is also not synonymous with a lack of leadership. To the contrary, it means anyone, and everyone is able to lead. The difference is that without compulsion, different ideas and solutions must openly compete against each other. No one can be forced to accept any service or use any software. The resulting competition means that multiple solutions to different problems can be market tested and users will ultimately vote with their feet.
The open access to information also proves significantly useful for those living in corrupt nations. Where excessive bureaucracy keeps government obscure and promoting clientelism, blockchain offers unrestrained transparency.
John Palfreyman, director at IBM, explains that assets can be registered and changes in their ownership can be recorded on a distributed shared ledger. Important information can be shared widely for all to see.
Transactions can be verified in real time and combined with thanks to advance privacy services, fraud and cybercrimes are nearly impossible to happen. Smart contracts automatically execute after following a strict protocol of verification and installation. Contracts will no longer be able to be broken.
All of this sets the stage for improving transparency, creating trust and cutting down bureaucracy between government, business and citizens.
And these stateless, blockchain communities are already developing. The most notable one is the DAO (Decentralized Autonomous Organization) developed on the Ethereum blockchain. Ethereum is popular for what Palfreyman mentioned, “smart contracts.” These are contracts that are written in code and is executed automatically once all conditions and consensus of the protocol are met. This what made Ethereum’s DAOs possible as the rules and functions of an organization are run entirely by smart contracts.
In practice, we can see private interest communities where decisions are made with the complete consensus of all the parties involved. And more importantly, they will be able to do it in a peer to peer and transparent manner.
Individuals will also be able to freely opt out and form or join new communities that meet their wants and needs. A columnist on blockchain technology at TNW, Mohit Mamoria believes that company towns of the future, far from being totalitarian organizations like Omni Consumer Products, will play a passive, groundwork role:
These [DAOs] will allow brands and corporations to officially support (not run) the global communities around their brands. The enterprise will only be responsible to define the constitution of the community and put it in the code. Beyond the constitution, the brand has no role to play; the member’s powers [sic] the community entirely.
The important decisions in the community are not taken by the top of the pyramid … but by everyone. Every proposal gets submitted in the form of a Smart Contract on which everyone can vote. If the threshold defined in the constitution is met, the proposal gets activated for the community… Businesses of future will not be only about providing value through products or services; they will also be about providing value to the community.