How DAOs can work for communities

Community pubs and shops

Communities coming together to run enterprises for themselves is not a new idea. The Co-op supermarket in Britain started in 1844 as a cooperative society to allow local people in Rochdale to group together to buy food in bulk which could be shared by the rest of the community. While community shops are growing in number, community pubs are proliferating even faster. By September 2019, there were 120 community pubs in Britain, many of them registered through the Asset of Community Value scheme. These pubs play an important role in the communities they serve, they “foster social relationships among residents, strengthening the level of cohesion in villages and positively contributing to communal well-being.”

So, what are DAOs, and how do they work?

By now, most people have heard of Bitcoin, and many people will also have heard of blockchain technology, which is the innovation that underpins Bitcoin and other cryptocurrencies. Blockchains are a way of storing information in many places at once, in a form that can be verified by anyone who wants. If a payment is made through the banking system, ordinary people cannot go online and look at the Barclays or HSBC database and see that their payment has been transferred. But with Bitcoin, anyone
in the world can see the transactions, in real time.

Making sure participants have an equal voice

Voting and decision-making are other areas where DAOs can improve processes. Instead of annual meetings where, despite the best efforts of participants, proceedings tend to be dominated by those who are used to having their voices heard and who understand legal and accounting matters, every participant in a DAO has an equal voice. In other words, DAOs can depersonalise decision-making, so that when tough calls have to be made (such as telling a departing member that there is not enough equity to release their stake immediately), members can place their vote in private and without being influenced by more vocal elements.

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Rhian Lewis

Rhian Lewis

1.6K Followers

Technologist, #Ruby, #blockchain & #cryptocurrency. Co-developer #altcoin portfolio tracker CountMyCrypto. Author of The Cryptocurrency Revolution