The DAO explores enterprise in a decentralized era
Previously in our examination of the burgeoning Ethereum blockchain industry, we took a look at Ujo Music's demo for sharing album sales among participants by deploying self-enforcing smart contracts.
The first decentralized crowdsale run entirely on the blockchain was by the Digix group, funding the peer-to-peer exchange of digital tokens representing ounces of gold kept in storage in Singapore.
This week "The DAO," a decentralized autonomous organization, is crowdfunding on daohub.org, and may provide a viable model for transforming the music industry. The DAO and other blockchain tech enterprises seek to decentralize the sharing economy by removing the need for trusted third parties.
The DAO just began its 28-day crowdfunding event and already has raised the equivalent of over $10 million in Ethereum's Ether digital currency. (Disclosure: the author participated in the Digix and DAO funding and purchased some tokens.)
In a similar manner to how independent game developers cover their costs by reaching out to backers through Kickstarter, anyone can purchase transferable DAO tokens to fund the initiative. Token holders will be able to vote on future proposals, while a board of curators ensures that those proposals' pitches accurately match their source code.
One team in the process of submitting a pitch to The DAO is Slock.it, whose automated smart locks could be used to rent out music equipment and other instruments, peer-to-peer. "Slock.it will follow this [proposal] model," community organizer Griff Green explained to us on Reddit, "and we already released our plain English Proposal Overview to build the Universal Sharing Network enabled by the Ethereum Computer." He expects many other proposals will follow in the months ahead.
Ethereum's decentralized network has already illustrated its potential for reducing the friction of a crowdfunding event by requiring neither a Kickstarter nor Indiegogo to approve the pitch or handle the funds. Such a degree of freedom could allow independent developers and freelance musicians to tackle projects more ambitious in scope and creative in their design than would have been possible before now.
The name "The DAO" is currently a placeholder, but whatever it is eventually called the organization intends to set the bar for decentralized entrepreneurship. Whether the intention is to automate the sharing of music sales (Ujo), replace dollar transactions with tokenized physical assets like gold (Digix) or trustlessly rent music equipment and spaces (Slock.it), the capacity for the blockchain to transform the music industry is rife with possibilities.
The stock.it DAO has 5.8M USD collected in less than a day!— Fabian Vogelsteller (@feindura) May 1, 2016
Like i said, crowdsales are blockchains killer app!! pic.twitter.com/wetWimfCtf