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Bitcoin and the rise of decentralized autonomous organizations

Author

Listed:
  • Ying-Ying Hsieh

    (Imperial College London)

  • Jean-Philippe Vergne

    (Western University)

  • Philip Anderson

    (INSEAD)

  • Karim Lakhani

    (Harvard Business School)

  • Markus Reitzig

    (University of Vienna)

Abstract

Bitcoin represents the first real-world implementation of a “decentralized autonomous organization” (DAO) and offers a new paradigm for organization design. Imagine working for a global business organization whose routine tasks are powered by a software protocol instead of being governed by managers and employees. Task assignments and rewards are randomized by the algorithm. Information is not channeled through a hierarchy but recorded transparently and securely on an immutable public ledger called “blockchain.” Further, the organization decides on design and strategy changes through a democratic voting process involving a previously unseen class of stakeholders called “miners.” Agreements need to be reached at the organizational level for any proposed protocol changes to be approved and activated. How do DAOs solve the universal problem of organizing with such novel solutions? What are the implications? We use Bitcoin as an example to shed light on how a DAO works in the cryptocurrency industry, where it provides a peer-to-peer, decentralized, and disintermediated payment system that can compete against traditional financial institutions. We also invited commentaries from renowned organization scholars to share their views on this intriguing phenomenon.

Suggested Citation

  • Ying-Ying Hsieh & Jean-Philippe Vergne & Philip Anderson & Karim Lakhani & Markus Reitzig, 2018. "Bitcoin and the rise of decentralized autonomous organizations," Journal of Organization Design, Springer;Organizational Design Community, vol. 7(1), pages 1-16, December.
    • Handle: RePEc:spr:jorgde:v:7:y:2018:i:1:d:10.1186_s41469-018-0038-1
    DOI: 10.1186/s41469-018-0038-1
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    References listed on IDEAS

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