Blockchain: Blueprint for a New Economy

of a Dapp. 67 In their view, the Dapp must

have three features. First, the application

must be completely open source, operate

autonomously with no entity controlling

the majority of its tokens, and its data

and records of operation must be

cryptographically stored in a public,

decentralized blockchain. Second, the

application must generate tokens

according to a standard algorithm or set

of criteria and possibly distribute some

or all of its tokens at the beginning of its

operation. These tokens must be

necessary for the use of the application,

and any contribution from users should

be rewarded by payment in the

application’s tokens. Third, the

application may adapt its protocol in

response to proposed improvements and

market feedback, but all changes must be

decided by majority consensus of its

users. Overall, however, at present

every blockchain project may have a

slightly different idea of the exact

technicalities of what the term

decentralized application comprises.

DAOs and DACs

A DAO (decentralized autonomous

organization) is a more complex form of

a decentralized application. To become

an organization more formally, a Dapp

might adopt more complicated

functionality such as a constitution,

which would outline its governance

publicly on the blockchain, and a

mechanism for financing its operations

such as issuing equity in a crowdfunding.

DAOs/DACs (decentralized autonomous

organizations/corporations) are a

concept derived from artificial

intelligence. Here, a decentralized

network of autonomous agents perform

tasks, which can be conceived in the

model of a corporation running without

any human involvement under the control

of a set of business rules.68 In a

DAO/DAC, there are smart contracts as

agents running on blockchains that

execute ranges of prespecified or

preapproved tasks based on events and

changing conditions. 69 Not only would

groups of smart contracts operating on

the blockchain start to instantiate the

model of an autonomous corporation, but

the functions and operation of real

physical-world businesses could be

reconceived on the blockchain, as well.

As Bitcoin currency transactions

reinvent and make the remittances

market more efficient, DAOs and DACs

could do the same for businesses. A

remittance operator might have many

costs associated with physical plant and

locational jurisdiction, and so, too, do

businesses, with local jurisdictional

compliance such as business licensing,

registration, insurance, and taxation at

many municipal and regulatory levels.

Perhaps some of these functions could

be reinvented in a more efficient way or

eliminated when moved to the

blockchain, and every business could be

truly global. Cloud-based, blockchain-

based autonomous business entities

running via smart contract could then

electronically contract with compliance

entities like governments to self-register

in any jurisdictions in which they wanted

to operate. Every business could be a

general universal business first, and a

jurisdictional business later when better

decisions can be made about

jurisdictions. The same could be true for

individuals as general humans first, and

citizens on demand later.

One example of the DAO/DAC concept

in terms of automated smart contract

operation is Storj. As previously

mentioned, Storj is a decentralized cloud

storage platform that completed a

$461,802 crowdfunding in August

2014. 70 Storj uses the Bitcoin blockchain

technology and peer-to-peer protocols to

provide secure, private, and encrypted

cloud storage. There are two apps,

DriveShare and MetaDisk, which

respectively enable users to rent out

their unused hard disk space and store

their files on the Storj network.

Purported methods for safely sharing

unused hard disk space have been

developed by other community

computing models like Folding@Home

and BOINC, whose software is used by

SETI@Home. Of course, as with any

distributed project that involves opening

your computer to others’ use, caveat

emptor applies, and participants in Storj

or any similar project should

satisfactorily inform themselves of the

security details. Storj’s altcoin token,

Storjcoin X (SJCX), is a cryptocurrency

that runs on the Counterparty protocol.

The currency is used to purchase space

on the Storj network via Metadisk and

compensate network DriveShare storage

providers. Storj is seen as a

decentralized alternative to storage

providers like Dropbox or Google; the

company estimates that customers

overpay for data storage by a factor of

10 to 100, and that blockchain methods

could provide cheaper, more secure, and

decentralized data storage. 71

DASs and Self-Bootstrapped

Organizations

Eventually there could be DASs

(decentralized autonomous societies)—

essentially fleets of smart contracts, or

entire ecosystems of Dapps, DAOs, and

DACs operating autonomously. An

interesting concept related to intellectual

property and new ideas is the “self-

bootstrapped organization.” 72 This is a

new business idea arising from the

blockchain or via a person, in which the

project idea spins out to become a

standalone entity with some standardized