Decentralised digital organisations and the key topics people are talking about
www.nesta.org.uk/project-updates/decentralised-digital-organisations-and-key-topics-people-are-talking-about/
www.nesta.org.uk/project-updates/decentralised-digital-organisations-and-key-topics-people-are-talking-about/
At the end of last year we put out an open call for essay pitches exploring how over the next decade decentralised organisations, enabled by blockchain, tokenisation or other digital solutions, will change the way we think about work and the structure of organisations. In total we received over 100 pitches for the essay competition, showing just how much energy and interest there is currently in this space. From the pitches, a shortlist of ten finalists were chosen who had been asked to turn their short pitches into full essays. In our previous update we announced the shortlist and discussed the relevance of this work to the current pandemic. In this update you can read more about each of the finalists’ essays and explore some of the key terms discussed in the pitches and essays.
Below, in no particular order, is a short description of each of the finalist’s essays. Please click on the title to read more.
Grace Rachmany makes the case that decentralisation does not provide a better model for running businesses. Instead she argues that it should be applied to areas where centralised organisations are failing, such as climate change, preservation of cultures, and cross-border disputes; where everyone’s interest is at stake and collective intelligence is needed to reach solutions.
Karissa McKelvey draws on Elinor Ostrom's seminal work on digital knowledge as a commons. She describes a framework for what a fairer, more secure and private web might look like and argues why blockchain is not the right tool for this job.
Rhian Lewis explores how decentralised technologies are not only relevant to global tech organisations, but can also support the growth of local initiatives, such as community-owned pubs, shops and cafés, and help us move towards a future where individuals can decide the future of their own communities and build the lives they want.
Primavera De Filippi and Tony Lai explore a fictional post-covid future through the eyes of Leia, a lady whose community embraced decentralised technology following the pandemic, as she talks to others from different communities who followed different paths in dealing with the crisis.
Michel Bauwens makes the case that we are currently going through a transitional phase of human history, moving from one system to another. He hypotheses about where we are heading, what changes we will need to make to get there and what technologies and tools we might need to get there.
Dionysis Zindros argues why the mechanisms used to reach collective agreement by current blockchains unavoidably favour the wealthy and are therefore not the answer to creating more democratic corporations and governments.
Jack Henderson argues that if we want to create more sustainable and egalitarian communities, the rules that govern them are as important as the data structures (e.g. blockchain) that enable them. He highlights how some of the ideas put forward by the RadicalXChange movement are being applied in this space.
Joshua D. Tobkin makes the case that over the next decade increasing internet surveillance will drive us to encrypt all our online data and communication. He discusses the role that blockchain will play in allowing us to coordinate and exchange value in such a world.
Kevin Werbach argues that big tech platforms like Facebook, Google, Amazon will not be replaced by decentralised alternatives because few people will accept a significantly worse user experience in return for better privacy. Rather, he suggests how big tech will participate in the new decentralised economy because it provides benefits for them as well.
Ziri Rideaux and Brendan Miller argue why over the next decade decentralized digital organizations will increasingly out-compete corporations and representative governments as the preferred way to organize human endeavors, and they describe what a global direct democracy platform might look like.
The summaries above give just a taste of the full length essays which will be published when the winners are announced at the beginning of August.
While the finalists work on their essays, we wanted to explore what could be learnt from the pitches we received about what experts in the field see to be the most important topics for the future of decentralised organisations.
We used a statistical technique called term frequency - inverse document frequency (tf-idf) to identify the 20 most important key terms from all the pitches we received.
The chart below shows the number of pitches each of the key-terms were featured in. We have only included key-terms that were present in three or more pitches.
Smart contract was by far the most commonly used key-term, mentioned in 20 out of the 103 essay pitches. A smart contract is a set of rules agreed upon by the involved parties and converted into computer code which can be executed automatically when certain conditions are satisfied (e.g. a task is completed or a payment is received). While the idea of smart contracts has been around since the 90’s, they remained largely just an idea until the invention of blockchain eliminated the need for a third party intermediary to enforce the contract, finally providing a suitable environment for them to operate. It is this ability to deploy smart contracts that is at the heart of the majority of suggested use cases for blockchain technology. It has also allowed the development of ‘Distributed Autonomous Organisations’ (DAOs)— essentially, leaderless organisations governed entirely by rules encoded as smart contracts. Pitches mentioned smart-contracts in relation to a wide range of use-cases from triggering repeat prescriptions, to automatically paying for energy usage and forcing the implementation of collective decisions.
A fundamental attribute of decentralised systems is that interactions take place in a peer-to-peer manner, meaning that people, or nodes, in the network interact directly whether that’s lending money to one another, sharing computing power or something else— probably the most well known examples of a peer-to-peer systems are file sharing services like Limewire and BitTorrent. Peer-to-peer was the second most commonly used key-term, mentioned in 11 out of the 103 essay pitches. Decentralisation—or centralisation— is not a binary option, there are varying degrees of decentralisation and many ‘peer-to-peer’ systems rely on a central authority to guide the network activity. At the extreme end of this is Uber, which has a very hierarchical structure, monitoring and controlling its drivers movements and earnings. At the other extreme is DAOs which have no centralised authority at all. Several pitches highlighted the distinction between truly decentralised and more centralised peer-to-peer platforms.
Decentralisation allows (and requires) a whole range of new governance structures and business models (both of which came out as key-terms in the pitches). Governance structures describe the processes of interaction and decision-making within an organisation that ensure that it is moving in the right direction towards its objectives and strategies. Within decentralised organisations decision-making is typically open to everyone involved and thus requires an innovative voting system. One such voting system that has received increasing attention over the last few years, Quadratic Voting (QV), was also one of our key-terms. This new voting system allows people to not just express what they like and don’t like, but also how important it is to them (you can read more about QV in this blog post).
While Open Source Software can be thought of as a kind of business model, it is much more than this. It is part of a much broader ‘open movement’ (e.g open data, open government, open science) which seeks to create common goods in a spirit of transparency, collaboration, re-use and free access. The open movement has a close relationship with the burgeoning decentralisation movement and they share many of the same norms and values.
To illustrate the interconnectedness of some of these concepts, GitCoin (which was mentioned in several of the pitches) is a decentralised application, built on Ethereum's blockchain, which matches funders with coders to support the development of open source software projects. One funding mechanism they use, Gitcoin Grants: CLR Matching, allows developers to crowdfund for open source projects with several sponsors matching crowdfunded contributions with their own grant funding automatically through a smart contract using a quadratic voting mechanism—those projects that receive donations from the most individual backers receive the largest portion of the match fund.
Other key-terms referred to broader potential use cases (supply chain, self-sovereign identity), complementary technologies (mobile phone, internet of things), and areas of potential disruption (financial institution, central bank, financial market) for decentralised digital organisations.
The analysis above provides just one, relatively simple, way of looking at key-terms and topics in the essay pitches. From reading the pitches myself several other fascinating topics jumped out including insights from thermoeconomics and permaculture, applications in education and transport, and opportunities for decentralisation in the fight against climate change, inequality and the current Covid-19 pandemic.
We look forward to sharing the finalists full-length essays and announcing the winners at the start of August. If you have any questions or comments, please feel free to get in touch with [email protected].
Thank you to George Richardson for your valuable advice on this analysis.
