Decentralization
You would have mostly encountered with the word "Decentralization", while trying to understand the concept of 'blockchain' in the world of cryptocurrencies. The essence behind the creation of decentralized cryptocurrencies like 'Bitcoin' is to replace the current monetary system which consists of a central banking authority such as the Federal Reserve System in the US, the European Central Bank in the EU, the Bank of England in the UK and the RBI in India. The primary aim of these digital currencies is to empower people through a decentralised peer to peer network by bypassing the central authority and middlemen (such as banks, financial institutions) in the existing monetary ecosystem.
Blockchain is a distributed database where the information is updated continuously on a shared database with 'blocks' that are linked and stored securely using cryptography, due to which the information gets reconciled on a continuous basis. Thus the information on blockchain is fully transparent and easily verifiable.
So what is common among these Central Banks?
One of the primary responsibility of a central bank is to ensure a stable monetary supply and keep the economy healthy. The central banks fulfills this responsibility by printing money based on the demand. However since 1971, technically central banks can print unlimited amount of money after the Bretton Woods system was abolished. In the Bretton Woods system, the printing of money was linked to gold reserves and ended the international convertibility of the U.S. dollar tied to the value of gold.
The value of currency issued by Central banks is derived from the belief of exchangeable value. In fact, both 'gold' and the 'paper money' issued by central banks don't have any intrinsic value, except the fact that paper money (e.g, dollar bills in the US) is guaranteed by respective governments (The Federal Reserve mentions that it costs just 16 cents to print a $100 bill). In case of gold, it is due to human's love for gold coupled by its limited supply.
A decentralized digital ecosystem will replace central banks in formulating the monetary policy and effectively planning the money supply. In the decentralized ecosystem, since the monetary supply will be decided by markets instead of any central authority, the allocation will be done efficiently and will grow the economic activity without creating inflation.
Can the concept of decentralization be implemented for incorporating a firm?
Thus, using blockchain technology and a decentralized approach, digital currencies are trying to change the existing landscape of consumer payments (P2P, like "Bitcoin") and business transactions (B2B, like "Ripple") however, can a decentralized approach be applied for incorporating firms? The answer is 'Yes'.
Centralized businesses with worldwide operations have a single point of failure with legal challenges. Businesses not supported by financial institutions are under constant threat of their business license being revoked by regulatory and tax authorities.
On the other hand, a Decentralized Autonomous Organization (DAO) provides business owners a collective way to manage their company in a more transparent and efficient way. In a DAO concept, the decisions of the company or organization is made electronically by a written computer code or through the vote of its members.
xDAC, acting as a subclass of DAO, is a company built on a decentralized network with a Proof of Work (PoW) incentive mechanism.
The xDAC Platform aims to solve the existing challenges faced by traditionally incorporated firms by aggregating the three components of a business setup (i.e. governance, finances and workforce) together on a single platform, by pursing a decentralized approach.
Governance and Disputes: -
xDAC platform presents a fully transparent platform so that its customers and business partners can trust the system. It uses a decentralized ledger technology allowing anyone to create and manage a company without any geographical limitations. All companies created on xDAC platform will be governed by same rules.
Voting on proposals between xDAC owners and investors will be governed by a DAO concept which will be deployed on the Ethereum network. xDAC owners will cast votes based on their xDAC token ownership.
Finances: -
Management can manage their team, financials by securely storing data on a decentralized ledger.
xDAC Tokens
The xDAC platform will be hosted on the Ethereum blockchain network and the xDAC tokens are ERC-223 compliant.
The xDAC tokens will be used as a decentralized exchange currency on the xDAC platform between the various stakeholders using the platform, such as companies, employees, customers and other 3rd party firms.
For more information on the xDAC project, please refer the below referred links.
website:- https://www.xdac.co/
whitepaper:- https://www.xdac.co/docs/xDAC-Whitepaper.pdf
Join xDAC @Telegram:- https://t.me/xdacgroup
Join at Medium:- https://medium.com/xdac
Follow us on Twitter:- https://twitter.com/xdacco
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Disclaimer:-
Nothing written in this article should be considered as legal or investment advice.