[ExI] Dawn of Autonomous Corporations

Christian Vanderwall cvanderwall14 at gmail.com
Tue Oct 22 03:53:59 UTC 2013


Dawn of Autonomous Corporations, Powered by

Still waiting for Bitcoin to be accepted at Amazon and eBay? Forget it.
Bitcoin will power the next generation of corporations and the only way to
deal with those corporations will be through Bitcoin (that’s right, they
won’t, or rather can’t, accept fiat like US Dollar). These ideas may seem
futuristic, but they are not more than 5 years away, maybe 10.
Autonomous Corporations

That’s right, autonomous corporations will be a new breed of corporations
that act and behave, for all practical purposes, just like regular
corporations. However, no one ‘owns’ them. Not the creator, not the
customers, not the governments, no one really. Sound familiar?

Bitcoin can be thought of as the first real autonomous ‘corporation’
although you probably don’t see it that way. Think about it – it provides a
payment protocol and employs miners to maintain that protocol. The employs
are rewarded with ‘stock’ that is split at most into 21 million units. You
don’t have to think of Bitcoin this way to get to autonomous corporations,
though it will help.

The idea is the same – this corporation has revenues, expenditures and
profits. However, once again, no one owns this entity, it owns itself. The
reason it exists is to provide a service at an extremely competitive price
that no human-based corporation can provide, so they’ll work higher up the
chain to provide ‘value-added’ services.
How Does this Work?

   - The corporation is completely decentralized, so no one can really shut
   it down. It lives in the cloud. It finds the cheapest and most reliable
   servers and lives there. This is also the biggest source of the
   corporation’s expenditure.
   - Revenues come from people using the service. For instance, if it is a
   file-sharing service, like
   revenues could be anything that regular file-sharing services have – paid
   hosting, advertising, etc.
   - People will make all attempts to rob this poor corporation of its
   money. This means it needs to keep the private key really private and
   decentralized. This also means major code changes, written by humans, will
   need to be tested on a child first.
   - It also needs to establish a protocol for communication (HTTP might
   not cut it in a decentralized network) through which people will interact
   with the corporation.

This kind of corporation isn’t restricted to live online. If the hardware
exists (which might take time), you could have, say, self-driving cars
owned by this corporation <https://www.youtube.com/watch?v=Pu4PAMFPo5Y>.
These are being worked on right now, and the first ones shouldn’t be that
far away into the future. See also Vitalik’s series on decentralized
autonomous corporations<http://bitcoinmagazine.com/7050/bootstrapping-a-decentralized-autonomous-corporation-part-i/>

Bitcoin makes this possible, for the first time ever, because it provides a
payment protocol that is independent of an entity and since this autonomous
corporation cannot deal with banks (for all practical reasons), Bitcoin
solves the major missing piece of the equation – payments. Bitcoin makes it
possible to program a corporation to accept payments and make payments
without having to deal with any intermediaries that cannot be trusted. If
you want to deal with such a corporation, you better have Bitcoin or any
other potential decentralized crypto-currency.

The last pieces of centralization are removed with a system like
Namecoin<http://en.wikipedia.org/wiki/Namecoin> that
is decentralized DNS system that the autonomous corporation uses as its
website/front where it interacts with people. There will ideally be a
decentralized identity system, like the Keyhotee
Communication can take place through something like
Bitmessage<https://bitmessage.org/wiki/Main_Page> or
through the Keyhotee mailing system that is decentralized. The autonomous
corporation cannot afford a central point of failure for essential
Value of Bitcoin

This is just one example where a protocol like Bitcoin can completely
revolutionize the world we live in. Lets look at the big picture. Who cares
if eBay accepts Bitcoin? *The real value of Bitcoin lies in economies that
don’t yet exist*. Now that Bitcoin has reached another high since the last
run-up, there will be several calls of a bubble. Lets not forget the real
strengths of Bitcoin in the day to day price fluctuations. These don’t
measure the value of Bitcoin and what it can be. And all people seem to
care about is drawing parallels to tulips!


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