PeerAssets allow creation of decks that can be used to create Decentralized Autonomous Companies (DACs). Let’s say that there is DAC and deck is created to identify it’s owners and their share of ownership (number of cards). I’m puzzled with the concept that how these cards allow owners to ultimately control and govern DAC.
PeerAssets has ability to record votes from card owners and therefore poll for the owners will. Usually this means that owners will vote on composition of the board, which on behalf of the owners makes sure that company operates to fulfill its purpose.
What I couldn’t figure out, was that since owners of DAC don’t have any means of controlling operative assets of DAC, how can they make sure that Board and rest of DAC operates as they vote? Is honesty and respect for deck votes only thing that stops operative personnel of DAC taking invested capital, intellectual property and other assets and moving to Bahamas, for example. For ordinary company, shareholder’s have laws that are enforced by governments to protect them in this scenario, but I guess DAC is quite uncharted territory in this perspective. After all, they might not be registered anywhere beside in specific blockchain. I wasn’t able to find any precedence on the case.
I would appreciate if somebody can enlighten me on this.
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Humans are humans, they cannot be controlled by signals on a block chain. Of course, there is no army that pledges themselves to the chain like there is a sovereign government. However, we are not very far from a world that begins to incorporate cryptocurrency into normal life. I think you will soon see that messages on a blockchain may be admissible in a court of sovereign law as a record of past events, for example. So you can prove that you did indeed sign a particular message at a particular time in the past. The reason I am making this point is to highlight what ‘human law’ is, and how it has consequences that apply to everything humans interact with. Part of the idea behind PeerAssets is that if a decentralized organization bases their asset on a reputable chain, their record is considered untarnished and universally admissible for future human consideration and action even if the legitimacy of the asset and its rules is called into question.
A few thoughts:
Courts are slow, expensive, and have limited jurisdiction. In the wild and woolly world of cryptocurrency, it’s best to assume (though it may not always hold true) that lost money cannot be recovered in meatspace (or will not be worth spending the resources to do so).
The challenge, then, is not to figure out how to point to a blockchain in order to prove to some toothless judge or uninterested law enforcement agent what happened on the high seas. Instead, the challenge is to design systems sufficiently decentralized (across exchanges, multisig signers, coins, addresses, etc.) so that foreseeable losses, including losses from human failure, will be, on average, small enough to be survived.
If a company is making 20-60% profit per year in an industry that’s growing at 100% per year, and it gets hit with a 20% loss, the most efficient course of action will usually be to: 1) eat the loss, 2) cauterize the wound, and 3) keep going. The likely least efficient course of action will be to seek retribution or restitution via the arm of a government.
Thus, I think a helpful attitude for anyone getting involved with these DACs to have is: if our company cannot survive a bit of human failure, then our company deserves to die. The sooner, the better. Really. Because then you can move on to something that actually works. And if, by some miracle, a government actually helps you recover money, you should think of it like winning the lotto.
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Good points from both of you.
PeerAssets DAC is interesting entity. It is lightweight from the regulatory perspective and it’s ownership and high level decision making is open to public. Currently, creating DAC and investing funds into such venture, will require most importantly trust into creators and operators of the DAC. Successful DAC needs honest, blockchain respecting operators, which also are able to execute DAC’s purpose efficiently against possible competition.
Having lived my life in organized society, for me this wild west seems new and slightly terrifying. It just takes time to adapt and learn to live in this sphere. If one want to, that is. Good thing is that DAC, investing in them or having anything to do with them isn’t forced on anyone. I personally will be looking what happens and how things evolve.
I think it will take quite a while before there’s meaningful support from law and government on actions of PeerAssets DAC type of companies. Laws of governments change terribly slow and mostly follows majority opinion. I don’t know about you, but around here majority doesn’t have any clue about crypto currencies and blockchains. I think I could see it during my lifetime though.
A peerasset doesnt necessarily require operators, depending on rules like the distribution ‘mode’. For example, a peerasset can be made using the ‘once’ mode, and sold in a transparent way. From that point on, there is no operator for the asset. In theory, you can attach an asset event to any blockchain signal, such that things like ‘smart contracts’ are conceivable. The protocol is very flexible, though lightweight. Custom implementations are always a possibility.