How social mining makes DAOs.

This page will give a in-depth explanation how social mining helps projects and blockchains turn into DAOs over time.

Bitcoin the largest DAO in the world

Bitcoin’s value-add is disputed: some members of the cryptocurrency community believe it’s a store of value while others assert that it is a currency. Irrespective of its value-add, Bitcoin is undisputed decentralized. From the point of its existence, it has attracted an entire ecosystem that revolves around it, much like the creation of a new company—however, in this company, there is no central authority and anyone is allowed to participate and add value to the prosperity of the company while acquiring a reward for that value-add. Subsequently, those who have managed to add tangible growth to the of Bitcoin have been wellrewarded. Early miners, who have protected the network, have treasure troves of binary capital worth millions of dollars, early buyers who promoted the merits of Bitcoin have amassed record returns on their holdings, and companies that have facilitated the usage and transfer of Bitcoin have acquired payments from the community in return for their service.

Therefore, Bitcoin can be asserted as a company, a truly decentralized company valued at nearly $200 billion. It has employees who join the ecosystem to either secure the company or expand its exposure and global utility and demand. Some of these employees, like exchange founders, have expanded their services to create entire departments (exchanges) that may compete against each other, but at the end of the day offer an aggregate growth of the Bitcoin Company in the form of greater, easier, and more accessible access to Bitcoin. Other departments, i.e. wallets, ensure the Bitcoin Company is able to penetrate new markets, access business development, and offer a better user experience.

Bitcoin is the first Decentralized company in the world

Payments are issued not in the form of newly printed capital but the appreciation of existing capital that the employees hold. Such is the nature of decentralized companies; such is the nature of a true DAO. In the Bitcoin Company, everyone has a genuine stake in the success of the operation and for this reason, even long-standing employees of the Company, who have now amassed fortunes, are as motivated as ever to work hard to expand the aggregate value of the DAO.

In the Bitcoin Company, everyone has a genuine stake in the success of the operation and for this reason, even long-standing employees of the Company, who have now amassed fortunes, are as motivated as ever to work hard to expand the aggregate value of the DAO. Unlike a centralized operation where only a few people (at the top) would benefit from the value-add of any individual employee, everyone benefits from the value-add of every single employee of a DAO. The Winklevoss brothers, one of the earliest major supporters of Bitcoin, are asserted as Bitcoin billionaires; however, their efforts to grow the Bitcoin Company benefitted not just them, but also all other members of the Company.

In the construct of traditional companies, employees are paid with the surplus capital printed in a country, and the wealth generated at the top mildly trickles down to the bottom. Bitcoin is the first company where one must pay to be an employee; in return, Bitcoin’s existence as a DAO ensures that the value-add is proportionally distributed across the Bitcoin Company, aligning each employee’s holding with the amount he or she gains from the Company’s growth irrespective of who added that value. Thus, everyone is incentivized to grow the Bitcoin Company.

Unlike a traditional company, the Bitcoin Company offers the unique opportunity of scaling incentives. At a traditional firm, the value of an employee’s work is dictated at the top and thus, even the most talented employees limit their valueadd as there is no incentive to deliver beyond what their work has been valued. On the other hand, the Bitcoin Company lets each employee decide the value of their work and scale their potential reward by simply buying more Bitcoin. If an employee of the Bitcoin Company feels he/she has the capacity to add extensive value to the Company, he/she is not bound to the value dictated by a central authority and can instead increase a stake in the Company and eventually yield a greater net reward from the Company’s appreciation sourced from his/her work.

However, Bitcoin is not a perfect DAO as not all highly talented employees have the initial capital reserves needed to hold a stake large enough to correctly proportionate their value-add with their reward. For this reason, while a DAO may, in theory, have the potential to allow anyone to control the value of their work, reality does not materialize as such.