Steemit: Showing Why We Need To Get Rid Of Private CompaniessteemCreated with Sketch.

in busy •  7 months ago 

The recent issues on the Steem blockchain can be chalked up to growing pains. We are entering a completely new paradigm and it will take us a little while to figure things out.

Of late, the topic of conversation is centering around governance. This is a valid subject since our old models are going out the window. In a world of centralization, governance is fairly straight forward. The centralized entity establishes the rules while also having the power to enforce such rules. This applies to companies as well as governments.

Things take on a bit different turn when we decentralize things. Under this scenario, nobody is in charge. There is not a centralized entity to act as big brother. This is the path to freedom via anarchy.

It is not something we are use to.

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Blockchain and cryptoucurrency are revolutionary creations that are going to move the world into a more decentralized format. Cryptocurrency is so explosive because it completely disrupts the present monetary system. At the core of all this is trust. Blockhcain offers a level of trust not seen elsewhere. The reason for this is there is nobody to trust. At the same time, a blockchain cannot break that trust.

Under our present system, there are many entities that exist for the sole purpose of being "agents of trust". Their role is to operate in the best interest of everyone. They are there to verify and maintain order. Of course, we see how easily this can be broken.

The banking system is a prime example of what a facilitator of trust looks like. Most of the financial industry is structure to provide that to people. Transactions taking place between unknown parties are facilitated by them. People also put their money in the banks believing it will be there when they go for it.

This all involved trust. Yet as we see repeatedly, the banks obliterate this trust with their greed. Of course, since the depositor is not affected, in the United States at least, people keep going back.

We are seeing the trust issue arise with data. Breaches are becoming more common with hacks or data leaks occurring with great frequency. This is something that is becoming so common is it not even news anymore. It is akin to it raining in Seattle. So what else is new? Another data hack? What's for lunch?

Lately we are seeing how a private, centralized entity can adversely affect the world of blockchain. The situation with Steemit Inc is pointing out flaws in our system. That entity is operating in it's own best interest which is not necessary aligned with the community.

I think at this point it is safe to say they lost the trust from the majority of the users on here. While many have the wait and see attitude, I do not think a survey would reveal a high score in the trust category.

One of the things that many offer up in the discussion about Steemit is the defense that "it is a private company. Therefore, they can do what they want". That is completely true. It is also the major problem.

Steemit Inc can do what it wants regardless of what the community thinks. They are not accountable to anyone but their shareholders or owners. Their goals do not need to mesh with the ecosystem at large. When it comes to transparency, it is their right to be as "hidden" as they want.

This is true throughout all of business.

Which leads me to the point of this article. It is time to consider getting rid of private companies. The technology exists to do that. Of course, to create an effective system, we do need to solve the governance situation.

Tokenization provides the ability to create companies that are public. I do not mean public as in IPO issued publicly traded companies. What I am referring to is companies that are truly decentralized and public. Nobody owns them. They are autonomous in nature and run by the community.

@dlux-io put out a great video that talks about this exact subject. That is a project that is working toward providing this feature to the Steem blockchain. It is about a 15 minute video put together by @disregardfiat.

https://steempeak.com/steem/@dlux-io/dlux-as-a-dac

Most people will find the idea of a business community where nobody is in charge or the companies not "owned" to much to comprehend. That is why I call it a paradigm shift. We are not looking at a slight alteration of what is presently in place. This is a radical move to an entirely new model.

That said, 25 years ago most people could not fathom shopping while sitting at a computer and never leaving the house. Technology offers us the ability to seriously alter the way people do things.

With decentralization, we can create community "owned" companies. They entities basically run by themselves with the community electing individuals to oversee things. While this sounds like a replica of the present stockholder idea, it differs in a few different ways. To start, the barrier to entry is removed and it is open to everyone. Also, most of the operations and rules are not implemented by people, but coding. This means it requires consensus to change many things. In the world of blockchain, things are constantly fluid. A system need not have a "term in office". When the voting, which is taking place all the time, changes, one might lose his or her standing.

Instant accountability.

It is time to start thinking of how we can structure out entities to be Decentralized Autonomous Organizations (DAO). In my view, it is a much better model. While it is still in the early stages, recreating the present system on top of a decentralized foundation is not going to work. It will negate all the benefits that blockchain offers.

Imagine if Steemit Inc was set up this way. Does anyone seriously think we would be having the issues we are? I do not believe that would be the case.

Businesses, both small and large, for far too long, operated with little to no accountability. It is time we start to change that.


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Not that I want to be nice to you...

But this is one great post.
I read it twice, and I hardly can find one single statement there, which I could argue against.

Resteemed.

!tip

In my opinion private companies are an essential component of our economy.
Steemit is just a bad example for it.

Posted using Partiko Android

Do you want to say, that this economy is so great, that it should remain unchanged forever, and prevail for ages???

How are you reading this into it?

Posted using Partiko Android

I agree. At some point we will find a healthy mix between private and decentralized companies. There are advantages and disadvantages to both. There are no absolutes, and purity tests are BS.

If you think so, whats the reasoning you hold behind private companies being essential components to the economy?

Posted using Partiko Android

Most interesting ideas just can't be executed by committee.
At a later stage, when the business case has been proven, you can switch to a distributed ownership structure - a listed, public company.

Posted using Partiko Android

Entrepreneurs succeed because they go against the herd, not by joining a herd. Committees are not nimble. It's harder to get a committee to adopt a radical vision. Countless companies were started by one person with one idea. Is the suggestion that their companies get seized and distributed/collectivized? That smacks of communism. Which of course looks great on paper and appeals to idealogues, but in practice the result is the opposite of innovation.

Posted using Partiko Android

Not for companies, coops and shareholders everywhere attest to that.

Posted using Partiko Android

When they are formed voluntarily, not proscribed.

Posted using Partiko Android

What companies don't form voluntarily?

Posted using Partiko Android

None. That's the point, and HOW they form shouldn't be up to authoritarians as long as the participation is voluntary.

What is one interesting idea that a board or committee cannot execute? If they cannot, why hand it out and switch?

Posted using Partiko Android

Tesla Model S or the iPhone are good examples of a profound idea pushed hard by a single person.
The committees made fun of them (Microsoft, Nokia, BlackBerry, auto manufacturers...)

Posted using Partiko Android

I don't know how else to phrase it, maybe: what stopped a committee or board from creating either of those things? Or why did it require "a single person"? Because other committees "made fun of them" isn't why those ideas required a single person VS a committee or why a committee isn't capable of bringing those products to market. I don't think you understood what exactly I asked and I don't know how to make it clearer.

Posted using Partiko Android

Committees go for the lowest common denominator. That's the opposite of interesting ideas.

Posted using Partiko Android

So the reasoning is "because committees go for the lowest common denominator, ergo they literally go for the opposite of interesting ideas".

So why does a committee go for the lowest common denominator? Is that your observation? Is that a consequence of any committee?

Posted using Partiko Android

We're on the same page @bluerobo

I usually agree with you but companies will use DAC's as platforms - they will not replace private companies. We just won't see this utopian gig economy you're talking about. The economics don't work out - people will always organize with each other for the individual's maximum benefit. It's game theory. We will be able to increase trust and transparency, but we won't ever have 100% trustlessness because it's not possible without "uploading our consciousness" to some kind of crazy android hivemind network. I don't want to live in a soulless, trustless world anyway, and thank God it's not possible.

I think there's plenty room for more of a balance. But where decisions need to be made fast and furious, you usually need a leader with a vision. Good post.

Wait what? Your thesis is lost on me..

You know you are proposing society to change the way it has function for about 200 years at least right?

Companies exist as a way to segregate business and personal liability.

If Sam the Carriage maker fails to make sale on his carriage, he'd be bankrupt. But because it's Sam who's bankrupt and not Sam's Carriagemaker Inc., the bank will come knocking on the Sam's door and take away his house. No one will want to start a business if a person is personally liable to all legal losses of a business!!! That's the whole point of private business!

Posted using Partiko Android

The business goes bankrupt, not the man. The man is responsible for the bankruptcy as he was responsible for the business. The part that makes no sense is that "no one will want to start a business if they are personally liable for the business". The whole point of private business isn't to avail oneself of liability, if your business goes bankrupt who wants to start a business if when they go bankrupt they are completely, totally liable for the bankruptcy..

Posted using Partiko Android

Legally speaking, this is a very nuanced subject. However, by all accounts, a company is incorporated as a separated entity in the eyes of the law.

If a company falls in debt, only the company assets are at risk, nothing is to stop directors to not assume responsibility for company debt unless found acting wrongfully.

Can't believe I have to research this subject to get my facts right.

To go back to our main points, I just don't see the possibility of the idea of companies going away overnight.

The DAO is great an all.. But history shows that the moment things goes south everyone immediately lawyers up and asked "which company is behind the DAO". It was a fun week on Reddit for me Tbh.

Posted using Partiko Android

The distinction is between Directors (employees) and Owner (employer).

Posted using Partiko Android

Do you understand what a DAC is?

Still waiting to see one that's working as intended.

Posted using Partiko Android

Why do you think Ethereum isn't working as intended?

Posted using Partiko Android

AFAIK Ethereum isn't a DAC.

Posted using Partiko Android

https://www.ethereum.org

Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third-party interference.

The Ethereum Foundation’s mission is to promote and support Ethereum platform and base layer research, development and education to bring decentralized protocols and tools to the world that empower developers to produce next generation decentralized applications (dapps), and together build a more globally accessible, more free and more trustworthy Internet.

Sorry for the bold.

Posted using Partiko Android

Yes..u r right..and freelancing is also growing fastest than ever...people want freedom and most pvt company do not offer freedom and its been proving day by day

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At least Steem can survive without Steemit. That's a plus.

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It will probably take many attempts and iterations to structure one but I think it will be well worth the effort. If there is one community that can do it, it would be a decentralized one passionate about what they represent as they would want the best for all. It will be a huge undertaking considering there are really no regulations or laws on this which will bring challenges as traditional structures are defended given the potential disruption this could bring to trillion dollar industries that float around the nonprofit space!

Posted using Partiko iOS

I love the concept of a DAC but I don't see how this works with heavy engineering. But it does fit well in software space where you can bring small components together into one distributed systems. But can you imagine an aeroplane or a highway being built this way? When no one entity has authority over the final product?

One entity does have authority. The DAC itself. Is there really that much difference in having 10000 board members instead of 10?

Having tried to deal with 5 board members I would say yes !

Businesses, both small and large, for far too long, operated with little to no accountability. It is time we start to change that.

They did - the customer - until governments started to get involved. The graft and corruption through legislation then came with it..

People also put their money in the banks believing it will be there when they go for it.

A common misconception. When you put your money in a bank, you are then an creditor, not a depositor.
It is not your money anymore.
There is no guarantees it will be there tomorrow (not even with government legislation and insurance.)

The situation with Steemit Inc is pointing out flaws in our system. That entity is operating in it's own best interest which is not necessary aligned with the community.

I'm no lawyer (perish the thought), but as I understand more about steem(it), it seem to me that with multiple accounts, bid bots, and the down voting function - then this is a manipulated market by the big players...

If steem is seen as an asset in some legal form, then 'financial manipulations for personal gain', questions need to be addressed....

This is simplistic and not accurate, obviously ...but you see my point? This a point of principle, not the detail....(this is just regarding the downvoting function)
https://steemit.com/blog/@lucylin/where-am-i-wrong-in-this

All these things need to be out in the open, whatever happens..

I don't think you understand what no accountability means. I also doubt you understand where or how long graft and corruption have existed in business.

A common misconception. When you put your money in a bank, you are then an creditor, not a depositor.

Care to substantiate this with why, such as why are you a creditor, especially when the debtor is all but absent and what is the significance of being a creditor as opposed to a depositor.

It is not your money anymore.
There is no guarantees it will be there tomorrow (not even with government legislation and insurance.)

OK, now could you explain why it's not your money?

Posted using Partiko Android

I don't think you understand what no accountability means.

Yes, I do. In a free market, accountability of a business(or no accountability) is expressed through the businesses surviving or not.
Simplistic? Yes. But it does work in a market with customers having full knowledge of the businesses they interact with.
(Gillette, anyone?)

I also doubt you understand where or how long graft and corruption have existed in business.

Your doubt is unfounded, then.

OK, now could you explain why it's not your money?

I find it quite surprising that you don't understand the depositor banking financial system.(seriously I mean, I'm not being facetious)

...this is the first link I used - there are much better pieces/you tube presentations explaining it better..

It’s even worse knowing that once you deposit your money in a bank, it’s not really yours anymore. You have turned over your property to the bank in return for a debt claim. You become an unsecured creditor holding an IOU.
https://www.nestmann.com/two-big-reasons-not-to-keep-your-cash-in-the-bank

  ·  7 months ago (edited)

So you would have been OK with Thales monopolizing all olive presses and renting them back for 10x the cost. Good business model. As long as you survive, you're OK. That's not accountability. Even if the customers have full knowledge of the business what choice do they have but to empower the monopoly, who cares if they know they are getting bilked or not, the olives are gonna spoil.

Your doubt is unfounded, then.

Let me guess, I shouldn't doubt that fraud predates legislation by millennia, fraud and corruption in business started with government after all. Everything was fine before, when businesses were "accountable" to the customer.

You missed this part.

Care to substantiate this with why, such as why are you a creditor, especially when the debtor is all but absent and what is the significance of being a creditor as opposed to a depositor.

Obviously, there isn't a creditor debtor relationship. That article only asserted without substance that you effectively chose to convert your valuable not iou money into ious. You really believe that? Anyway, no need to explain anything obviously since you do not understand what you are saying, let alone why or why what you're saying is true or correct.

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Another great comment @lucylin

Thx for sharing that link. Will check it out right away

Yours
Piotr

I think some fundamental questions need to be asked about the structure that has bee put in place, through coding...

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Dear @taskmaster4450

Blockhcain offers a level of trust not seen elsewhere. The reason for this is there is nobody to trust. At the same time, a blockchain cannot break that trust.

I agree that blockchain brings more trust, but seeing debates about making a fork on STEEM because some people do not like the fact that Steemit Inc is powering down and someone suggested that we those assets should be frozen ... those kind of events are crashing this trust.

Yet as we see repeatedly, the banks obliterate this trust with their greed.

I cannot understand why so many people are frustrated on banks for their greed. Every business is "greedy". The only problem is that Banks managed to dominate their industry, which is never good for final consumers.

But greed itself is nothing bad. Greed is the only reason why entire economies do exist in the first place. Wouldn't you agree?

It is time to consider getting rid of private companies

I did consider it and I would be strongly against that idea. Sorry. But I think we need private companies as much as we do need regular people here.

With decentralization, we can create community "owned" companies. They entities basically run by themselves with the community electing individuals to oversee things.

That could work only in theory. Would anyone care about running company if I this business would not be private? Most likely the answer is NO. Those businesses would fail more often than not.

again, great piece of writing. I wonder if you will reply to any of my comments :P

Yours
Piotr

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