BitShares: Rough guide to the DAC - Part 1: Committee Members and Governance
So, you wanna work for the BitShares blockchain?
(Quick warning: This got fairly detailed in explanations. There is a TLDR at the end).
For all the BitShares operation and community, this 3-part article will introduce some key concepts by which the eco-system runs without a traditional Board of Directors / Management team in the centralized, corporate, manner we are conditioned to accept. If Bitcoin was the first platform for decentralised money; BitShares is the first platform for decentralised business!
There are no fat cats, cigars or cognacs. Or bosses.
BitShares is a DAC or “Decentralized Autonomous Company”; a concept which means there is no central HQ, CEO, or board of directors. BitShares runs as a for-profit company which enables its shareholders to decide on the future direction and strategy. This isn't possible without the Committee Members however, and before we describe that role, a quick summary of all the ways shareholders can participate in the BitShares DAC:
– Store value, trade, on-chain vote for witnesses, committees, and workers [every account, lifetime or not]
– Be a worker (coming in part 3)
– Be a witness (part 2)
– Committee members (this article)
– Community or company dapps built/run atop of BitShares; (up-coming post)
It’s a question often asked to us or other members of the community by folks joining BitShares - Who makes the decisions around here, if everything is decentralised? Or if you understand that, then you want to know the mechanics behind reaching an ‘on-chain consensus’ for business decisions. BitShares is run 100% by its shareholders. However, there still needs to be governance over a democracy, or only 'forking chaos' would ensue (see Bitcoin). So it is provided by the committee (also voted in or out by the shareholders). Shareholders can also form and propose a Committee member, or just vote for other existing members. All decisions can be voted on by all shareholders (inclusive, regardless of holding size).
BitShares offers products to the public for a profit
BitShares is like no other corporate entity or company preceding it, being it is a DAC run by the shareholder community. However just like a company, BitShares offers products that earn shareholders profit. In this case the decentralized exchange, Token factory (UIAs), Smart contracts and more. We'll cover these in up-coming posts, however it is by committee that the parameters for native platform products are agreed and set.
Profit generating organisations needs governance, in lieu of centralization
You’ve heard that BitShares is a DAC. If you’ve wondered if this is some kind of SciFi-esque new technological revolution with sentient AI machines coming to be our new masters, please don’t. Although there are automated or ‘robot’ like processes alongside the immutability and transparency of a public ledger (blockchain), all is still run by code and humans are required to set the parameters, fees, and other major decisions affecting the BitShares blockchain. Not AI, but people. Unlike in the traditional corporate-capitalist model (centralized world), no single entity owns or has majority control over BitShares. Instead, the Committee sets parameters or makes decisions (by having consensus) which the shareholders must then approve. Ever since it’s creation, Bitcoin had failed to reach a consensus about important business decisions such as the size of blocks. The cryptocurrency community realized that governance in a DAC cannot be ignored. That is why the role of the committee is written into the blockchain, as a tool for on-chain consensus – whereby Committee members can define the preferred parameters, and then they are subject to shareholder approval (by voting). With the consensus on-chain, the end game is the blockchain strategy will remain undivided.
Who becomes a committee member?
Most all Committee members are also witnesses, many are also workers. If there was a chain of command in BitShares, Committee would be the top level and consists of founders, core admins, partners, marketeers and companies that run for-profit services or products on top of BitShares, (providing volume, liquidity, contribute and grow the network) such as OpenLedger exchange. Needless to say, to win the shareholders popular vote, partners must make available to all of the community one or more of contributions via technology, apps, people, infrastructure, liquidity or other value to the ecosystem. Basically, any individual or group bringing something that drives BitShares success, is deserving of a proposal to be voted onto the committee. In a nutshell, although not documented or written - Committee members can be viewed upon as the major ‘players’ and influencers in BitShares; unpaid volunteers with a deep vested interest in the platform, who are considered to be at the highest level of trust, responsibility, and expertise when involved discussing or contributing to major decisions.
It bares worth repeating, the beautiful caveat in BitShares is that anything the community propose must be voted on by the shareholders. It is also rigged, so vote weight also requires 50% of community +1. No single entity can ever take majority control, or even have more than 1 committee member without a unique, impartial cause.
How to apply to be a committee member
As mentioned above, committee members are providing something of significance to the eco-system. If you want to join the committee, you are already deeply vested to BitShares and would only be reading this for critique - if so, please provide your inputs and corrections below in the comments ;)
Regardless, the process of joining the committee is documented and straightforward. First one must make a post about why they think should form a committee member, here is an example. Then following the CLI wallet commands to actually create the on-chain committee proposal for others to vote on (beyond scope of this article, and can be found in the official docs.
In all cases, committee members make a proposal, publish and promote it on a relevant public network such as Steemit.com, bitsharesfoundation, or bitsharestalk.org
How to view and vote on your favorite committee members
Log in to the BitShares UI, select 'ACCOUNT' section (top), then follow the arrows below.
Cast your votes for Commitee here
Conclusion (or TL,DR)
In BitShares, we have an instance of the world's first decentralized autonomous company (DAC) whereby all decisions must reach on-chain consensus, via shareholder votes. In order to provide governance, shareholders create and then vote for committee members to propose strategic or technical changes to the core blockchain parameters. In this article, we've described an overview of the DAC, the roles available, then more on committee members with a screenshot of how to vote for them.
The trusted infrastructure providers, and block producers, and how they earn rewards on Graphene based blockchains like BitShares, STEEM and GOLOS, via Proof of Stake (DPoS) "mining", and how this differs to Bitcoin mining. (Hint - It isn't mining).
words and images: @britcoins