What is a DAO (Decentralised Autonomous Organisation), and how does it work?

[Music] hey and welcome to another episode of ask luno we've been listening to your questions here come the answers open wide today we're looking at decentralized autonomous organizations and how they work a decentralized autonomous organization also known as a dao is like any traditional organization like say uber or google the big difference is that it's autonomous it operates completely transparently and independent of any human intervention including its original creators no boss result well sort of here's how it's done dowels are run by programming code written on a collection of smart contracts written on ethereum imagine an autonomous uber-type transportation company let's call it dawuba darupa has been created by a group of developers and entrepreneurs as an alternative to centralized transportation companies and let's turn it up a notch further by saying that the cars this dao will use are self-driving cheers elon so in this scenario there's no people involved once the dow is released when they get started creators set up a series of interconnected and automated smart contracts on an open blockchain like ethereum a series of smart contracts will trigger invoices and collect payments from the people who ride in darupa's cars the smart contracts running the dao would also use the money it collects to maintain the cars buying parts arrange and pay for cleaning services and adjust prices according to its cost again you'll notice one important element missing here humans is all done without the need for human input no middlemen more efficient more streamlined of course this is a very futuristic example that involves complex technology like self-driving cars and the internet of things but simplest systems are also possible today say a vending machine that orders its own products when inventory gets low and automatically pays for the order how a dow works is really up to the development team and what processes they decide to automate it can be as complex or simple as it needs to be that's not to say that humans aren't involved at all we're not going to be completely useless in this dow based future much like traditional companies dows can have stakeholders that vote on changes so while they run autonomously so-called stakeholders can vote to influence decisions and direction dow stakeholders own tokens or stake in the company and use these to vote tokens can be released during the funding period before the dow is released or at set intervals set out in the rules that are put into the smart contracts that it runs on a perfectly structured dow gives every investor an opportunity to shape the organization there's no hierarchical structure which means every innovative idea can be put forward by anyone and considered by the entire organization however dao's just like pretty much everything else connected to cryptocurrencies are an extremely new and to some extent revolutionary technology so do your research and don't just jump in without thinking it's a brave new world of possibilities what businesses do you think could be dowsed let us know in the comments and don't forget to subscribe like and hit the notification bell so you always know when we've got new crypto knowledge for you hashtag to the moon

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