Countries Versus DAOs

12 years ago I wrote a post on this blog in which I was comparing social media networks with real countries: I’m A Twitter Citizen, I Work In Stumbleupon, And I Occasionally Travel To Reddit. In that blog post, the comparison with countries was based on the numbers of users on those social networks. With around 2 billions, for instance, Facebook will be today the biggest country on Earth (but, as we will see, there’s a lot more to a country than just the number of people in it).

A lot has happened in just 12 years. We evolved in unexpected, and sometimes strange, ways. And one of the directions in which we evolved has to do precisely with the concept of “country”, more precisely with the obsoletion of it.

What follows is an attempt to expand on that initial blog post, and to see how our current reality has changed.

A (Very) Basic Country Blueprint

A country, as we know it, has a set of rules that are known and approved by its citizens. Facebook doesn’t make their rules public, nor do they let the users to decide on them. The same process started to happen in real countries too, although a bit more subtle. The voting process is way too far apart (4 years in most countries) and in between a lot of the activity gets obfuscated. Sometimes this interval not only hides the real power dynamics, but also allows abuses to permeate the fabric of society (the Covid-19 pandemic is a good example in this area).

A country also controls a certain amount of economic activity, by harvesting resources, manufacturing, selling skills, etc. To continue the comparison, in Facebook users are selling their attention for vanity metrics, enriching the Facebook “elites”, while they just become more and more addicted. Not a very good country to live in. You may not pay tax, like you pay in physical countries, but your attention is harvested and sold, while your behavior is profiled with incredible accuracy and you get served an algorithmic reality. The social media AI knows you better than you know yourself (but that’s a topic for another article).

During the last 5 years, a new type of organization appeared: the DAO. Digital Autonomous Organization. It is similar to a physical country because all the rules are known and approved by its participants, and there is a certain level of income that it’s generated inside.

I believe DAOs are very well positioned to replace what we now know as countries.

Here’s why.

1. Very Low Entry Point

A DAO can be joined from a cheap mobile terminal, and we live in times when internet and electricity are commodities, just like water and land were commodities during the Agricultural Revolution. Humans can organize on top of internet and electricity just like they started to organize on top of land and water sources thousands of years ago.

2. Faster And Streamlined Governance

In a DAO, proposals and votes can be deployed in a matter of weeks / months. Technically, they can be deployed in minutes, but there is a certain amount of time needed to actually process the proposal and understand its implications. This streamlined governance process leaves less space to abuse. Please note that I’m not saying a DAO is a “democracy”. I believe we will soon have another term that describes a fair governance, but it will not be about “power of the people”. Probably something around the concepts of Sovereign Individuals.

3. Potentially Unlimited Vertical Scaling Of Income

Because all assets in a DAO are non-corporeal, really just some bits on a storage device, they can be scaled virtually ad infinitum. A DAO can have a governance token, a utility token, thousands of meme coins, NFTs to define individual ownership and so on. Wealth was always imaginary (people project value to various substances, based on arbitrary criteria: gold, because it doesn’t decay, oil, because it makes you move form point A to point B, etc). But within a DAO, wealth is more imaginary than ever.

4. Location Independence

You can be part of many DAOs at the same time, without actually being present in a certain physical place. Passports are suddenly obsolete. If anything, they’re replaced with NFTs asserting citizenship / specific social status, or with public / private keys pairs. Once the metaverse explodes, though, each DAO may construct its own physical space too, if need will be. It won’t need more land, it will just augment the reality around each individual in specific ways.

Like I told you, a lot has changed in the last 12 years.

And I’m very curious how much of what I wrote here will actually happen, in the next 12 years.

Photo by GeoJango Maps on Unsplash

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