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4 months ago
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What is an organization? Pretty much, you've been dealing with them since you woke up today. What was the first thing you were doing? Aha, getting off the bed. Your bed is a product of an organization — a group of people worked together to make the bed and sold it to you, or your landlord. Then you go to the bathroom and start scrolling. Well, that thing in your hand is produced by the coordination of thousands of organizations — each producing a small part — and each of them probably has thousands of people inside. I, Pencil?
You're looking at some news on your phone that’s produced by a news organization, in an application that was made by another organization. Then you get an Uber — product of an org — to go to work (also an org). Meanwhile, at work, you sneak into the bathroom again to watch a little bit of your favourite show — poao (product of an org), brought to you by Netflix. Poao.
Where were we? Onchain organizations? Huh, in the toilet. You come out, go to your desk, and open your phone. Since you’re having a really productive day, you decide to order some food from DoorDash — poao — which takes your order, sends it to a restaurant — poao — and has it delivered by a delivery person, who is basically an organization by himself.
After your very productive day, you come back home and start exploring the stock market — something you’ve been doing for the past 5 years. You need to get a code from a government agency — which is an organization — to invest in stocks, which goes through another organization. You recently became kind of rich and want to risk your money, so you got interested in investing in venture capital funds — another org. Out of your richness, you give some of your money to a new charity that wants to send money to Ukraine — another type of org.
Now it’s 2 a.m. and you can’t sleep. Time to think about the worst things that can happen to you. Let’s put some money into your retirement fund — and maybe some into a trust fund for the kids. There is an org behind these funds to ensure and enforce the terms. They have a lot of papers. Bureaucracy, it’s called. Time to sleep. Organizations play very important roles in our lives. People even win Nobel Prizes for studying them. Read more at How to Make a Revolution?
Well, there are very different types of organizations. They have different types of structures for different purposes. But they are mostly general. You need to go to your government and choose your structure from a few of them, which a lot of people who studied ‘law’ made them, fill some paper, go to the bank, make a bank account, pay some money to the government every year to maintain it. Bam, you created an organization. Your org could be a hedge fund, investment firm, restaurant, insurance company, plumbing company, retailer, fund manager, church, mobile application, co-op, university. You can’t be a government, because the government doesn’t want another government. The options they provide are limited, rigid, expensive, non-updatable.
This structure could be a corporation, LLC, GP, LP, LLP, sole proprietorship, non-profit, foundation, co-op, trust. They are just a fiction, the government enforces it if something goes wrong. Jensen and Meckling wrote in their ‘Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure’ that:
It is important to recognize that most organizations are simply legal fictions which serve as a nexus for a set of contracting relationships among individuals.
Very nice. so how can we explain the organization that bitcoin miners have to keep a trillion dollar network alive? did they go to a government or made one of these fiction? I doubt.
Bitcoin miners and their work together that is producing 1T value is an organization without a government (intermediary). I call it an onchain organization, or unchain organization, whatever you are comfortable to call.
So now the question is that is there any benefit to turn an offchain organization to an onchain organization? and the second question is that are there any onchain organizations that can’t exist offchain?
Consider any square to be an organization, any organization sort of having these relations:
Like, imagine the organization in the middle is a simple restaurant, it asks for a loan from a bank, an org, and pays back to loan to the bank too. It gets payment from customers through a couple of softwares with a couple of intermediaries. Namely, visa, mastercard, POS provider, and the bank. Each one is charging some fees either by taking a share from the purchase or by blocking the money for some time.
The restaurant needs to pay to employees, which uses a couple of softwares that each seek some rent from the main organization. It also needs to go through some trouble (that has very bad looking softwares) to pay tax, that he doesn’t know how it is being spent.
But what happens if this restaurant change his rails of operation to be onchain? how much do you think a restaurant is losing by being offchain? well, I state that it’s more than you think, look at this article from a16zcrypto to see that by eliminating just the intermediaries chipotle can have 12% increase in net income. Is it enough margin for them to change in the coming years? I can’t see why not.
Back to the restaurant, it can get a loan by just asking loan from another onchain loan provider, eliminating the bank. Well, most restaurants are using some sort of incentive programs for their loyal costumers, they need to have another software that maybe is giving some ‘points’ on every purchase, that is useless somewhere else. What happens onchain? they can issue some fake dollars that only they accept in the world, they will sell each $0.95, later the costumers can purchase with these fake dollars that are onchain. Giving their money before hand to the restaurant, taking a discount. win-win.
So now it’s time to file tax, does it need to go through thousands of papers? well, no, since the data is there, ask your personal AI, it’s just a query, 5 minutes, $5 perhaps. Thanks to the new rail. Now you paid to a government agency that just came onchain. You and reporters can see where does your money being spent. Do you like it? I’ll write more here to show how other types of businesses are better off being onchain later here.
OMG, these are types of organizations that have never been possible before for them to exist. In the non profit world, has it ever been possible before to have an entity online that doesn’t exist in the real world, that people who care about Ukraine, help them by sending money to onchain representative of defence ministry of ukraine and see that they are actually spending it on the cause you wanted. Or not, buy some fake dolars from lockheed martin, like the way you did for the restaurant, and send it to onchain defence ministry.
Or you like to support for the legal defence of Tornado cash founders? just donate some USDC here, it is live now! You can do it from anywhere in the world with one click and not giving 10% to intermediaries. But later maybe we can just buy ‘fake dollar’ from some law firm and pay those fake dollars to this organization.
Have you seen the fandoms of TV series? most of the people who contribute to them, don’t know other people on the platform in person, and they don’t have money incentives for their contributions. Now imagine that these people who write sequels of friends tv series, make an onchain organization, they will buy or rent the actors rights from their own organization, find an investor, and produce one more season with people you found on internet using AI, whom you don’t know if you can trust or not, but you don’t need to, every revenue comes to a shared wallet and both of you need to agree for any money transfers. Was that possible before?
Or imagine you have 2 bitcoins, you don’t want to sell (best choice) and since you are ideologically holding it and don’t have cash to pay your rent this month. you go online to an onchain org that they lend money.
-Knock knock, hello, I’m here to put my bitcoin as collateral, it’s worth $100k now, I need $20k for two months, can I get a loan?
-Hello, sure, we offer 6% interest
-Humm, but the other onchain org offers %5.5 [send an screenshot]
-Ok, let’s do 5.5%, make a new wallet, send bitcoin there, give us a signature, give ‘Trusted Organization’ another signature, and give your self a signature too. This wallet should send the transactions only when it has 2/3 of the signatures, so I can’t get your bitcoin if you and the ‘Trusted Organization’ don’t approve, and you can’t get yours too, if we both agree on the things, we won’t bother the trusted org, if there is dispute, they will judge.
Or like, you are a technologist that have $20k in your wallet and you want to invest in new technologies in another country, there is a new early-stage VC there that they invest in early stage startups, you are like, why not me investing too? it wasn’t possible before. If you just wire the money to the startup or the VC, your money is gone and you don’t have control over it, the government, the bank, the VC, or even the startup could be gone. Or maybe they are trustworthy but for you it’s hard to trust, simply because who wants to defend your rights?
But what if you can send the money to the destination, have 2 signatures (like the bitcoin example) for yourself, and one for the destination, and if you see something is not working, withdraw your money. It provides matches capital to labour in countries that capital is not accessible, to produce more.
Or think about something fun organization, some people who are very interested in OSINT (Open Source Intelligence) and are anonymous on internet, and do it for fun to find some criminals using online data, get together to make an anti criminal organization, they will get some funding from themself+public and incentivize others to anonymously give secret information about criminals to them. I bet, they will work more effective than the current system to gather data, investigate and report to the police.
Do you want to make an onchain organization? you can’t, we don’t like this name, we have a new name for them, a Base. You can build a Base on zroapp.xyz.
