Blockchain DAO vs. Joint Stock System: Reasons and Significance of Production Relations Revolution

Author: Liu teaches chain

This article is based on the author's sharing of the Soteria & Magic Flute technology development community. The full text is about 6,000 words.

Guide :

What is a production relationship? What kind of technology is the blockchain so much that it is believed to bring about a global revolution in production relations? What is the significance of the changes and breakthroughs in production relations to our economy and society today? These questions are what this topic sharing hopes to cover and answer.


Since the birth of Bitcoin in 2009, the blockchain technology has been born for 10 years, and the interpretation and interpretation of various angles are very diverse. There is a saying that many friends have heard that blockchain is such a technology that it will have the opportunity to change production relations.

What is a production relationship? What kind of technology is the blockchain so much that it is believed to bring about a global revolution in production relations? What is the significance of the changes and breakthroughs in production relations to our economy and society today? These questions are what this topic sharing hopes to cover and answer.
According to Marxist political economics, production relations are the sum of various relationships formed by people in the production process , while the relative productivity is the ability of people to create wealth, such as people, means of production, objects of production, etc. Composition .
The economic base determines the superstructure, and productivity determines the production relationship. Therefore, the production relationship needs to adapt to the current level of productivity development, otherwise it will become a paradox that limits the development of productivity. At this time, contradictions will occur, leading to a revolutionary change in the production relationship, replacing the old production relations with new production relations that adapt to the development of productive forces.
In ancient times, the level of productivity was low, people's labor results were only enough for their families, exchanges were rare, and they were limited to the tribe. People's social relations are simple, and the number of people in a lifetime may not exceed the upper limit of Dunbar's number . "The neighboring countries are facing each other, the voices of the dogs and dogs are heard, and the people are not going to die." ("I")
This simple acquaintance society, almost no need for long-distance credit media tools of money, relying on the natural trust between acquaintances, and each person's own minds of "commonly remember" or "knot notes" is enough.
With the advancement of human productivity, farming civilization, industrial civilization, and today's post-industrial civilization, people's productivity levels have exploded, socialization has become a major division of labor, and labor results have been extremely surplus. At this time, a large-scale, The need for long-scale, long-distance exchange, currency, as an important medium of exchange, has been on the historical stage.
“Money is the most common and effective system of mutual trust in history.” “Even Christians and Muslims who are religiously incompatible with each other can achieve the same belief in the money system.” “Compared to language, law, culture, Religion and social customs, money is more open-minded. Among all the belief systems created by mankind, only money can cross almost all cultural divides, and will not discriminate because of religion, gender, race, age or sexual orientation. With the money system, people can work together even if they don’t know each other and don’t know each other’s character.” (A Brief History of Humanity)
The distance between division of labor and exchange is so far away that the network is so complex that we have no way of knowing everyone who provides us with labor, nor can we know everyone who will enjoy the fruits of our labor. With the currency and price system, this miracle has emerged.
Money is the result of exchange, not the reason for exchange. That is, the need for exchange first gave birth to money, not the other way around. The exchange occurs again because there are surplus productions available for exchange. The surplus of production is the result of continuous improvement and improvement of the level of productivity. So why is the level of productivity improved?
In the 1860s, in the capitalist production of the United Kingdom, the production of large machines began to replace the factory handicraft industry, and the productivity was developed by leaps and bounds. In the history, this process was called the "industrial revolution." Around 1840, the large machine production in the UK basically replaced the traditional factory handicraft industry, and the industrial revolution was basically completed. Britain became the first industrial country in the world. At the end of the 18th century, the industrial revolution gradually spread from Britain to Western Europe and North America. Later, it gradually expanded to other parts of the world.
After the industrial revolution, the entire capitalism and market economy flourished, and high-tech technologies were applied to global production and trade, creating a huge global wealth to this day. In the past 300 years, the market economy has created more wealth than the sum of the social wealth created by humans thousands of years ago.
What is the cause of the Great Bang? Many times we only see that new technology has been invented and applied, so our productivity has improved, so we can create such a big fortune. But what I want to tell you is that I only saw one aspect. Understanding the contradictory movements of productivity and production relations, we know that production relations are the most critical factor in determining whether productivity can be released to the maximum extent.
In 1602, the Dutch East India Company was established more than 100 years before the Industrial Revolution. The Dutch East India Company is recognized as the first joint-stock company in history. It is the world's first multinational company. It is the first company that can self-organize mercenaries and issue currency. It is also the world's first large company, owning and other The state establishes a formal treaty and has the power to colonize and rule the land. The government holds shares and has paid dividends to the government for 18% each year for nearly 200 years.
What is a production relationship? The company is a production relationship and is the most important economic activity subject of the modern global economy. It is precisely because of the modern company system that was invented 100 years earlier than the industrial revolution that it led to a leap in the level of human production relations. Larger people, money, and things were organically organized to achieve production goals. The modern company system is the cornerstone for people to break through Dunbar and collaborate on a larger scale and higher level. An increase in organizational efficiency from 10 to 100 times leads to an exponential leap in productivity levels.
Modern corporate systems are so deeply rooted that people have become accustomed to it today after only a few hundred years. Today, when we meet each other, we will ask, which company are you from? Which unit are you from? Where are you going to work?
However, what most people don't realize is that we didn't ask these questions when we met people 500 years ago. All the students who studied 500 years ago would not think which company I would go to after graduation. The company did not exist 500 years ago. Do you firmly believe that the company will "exist" in the next 50 years and 100 years?
A company is just an organizational form that organizes productivity together to produce and create wealth. Is it the best form of organization? Maybe in the past 300 years, or the answer is, in fact, yes. But is it still in the next 100 years? Maybe not.
To answer this question, we need to look back at the depths of history and see what was invented 500 years ago?
There is a mathematician in Italy, Luca Pacioli, who published a book in 1494, "Summade arithmetica, geometria. Proportioni et proportionalita". In this book, he first proposed in writing that the most important technology that has been established until now is the foundation of accounting double-entry bookkeeping technology, so he is called the "father of accounting."
Everyone will see that the modern company system has been established for more than 100 years after the double-entry bookkeeping, which is the establishment of the Dutch East India Company.
A company is actually something that does not exist in the physical and objective world. It is just something we imagined. Money is also what we imagine. The country is also what we imagine. This kind of imagination is a common vision, that is, consensus.
“Whether it is a modern country, a medieval church, an ancient city, or an ancient tribe, the foundation of any large-scale human cooperation lies in a fictional story that exists only in the collective imagination.” “The truly unique function of human language is Gossip, that is, the expression of non-existent things (fictional stories), so that human beings can construct a common imagined reality, that is, common beliefs , and thus carry out large-scale solidarity and cooperation, which is the core of the cognitive revolution that gives human strength." history")
Why can the company be established? The reason why the company was established, my point of view, is because of accounting. Because of accounting, we can look at a company's account, trust a company's account, and believe that a company "real existence", this company can become a so-called legally qualified economic entity, also It is the so-called "legal person" we are familiar with.
Because of the accounting bookkeeping, we ensure that every company has an account, so we think that if there is no problem with this account, through severe punishment, through accounting education, by carefully letting them not remember the wrong account, do not record false accounts. Then we can dare to invest in a company, we can dare to go to a company to receive wages, we believe that this company can pay us. But I want to tell you what this trust comes from? From this technology.
From this point of view, blockchain as a so-called distributed accounting technology, what advantages does it have? The essence of accounting is to establish a common belief. The more accurate and reliable this account is, the more difficult it is to tamper with, the more trustworthy it is, and the stronger the consensus. Traditional accounting bookkeeping relies on human nature, pays social costs, and is easily falsified.
One of the goals of Bitcoin's invention is to eliminate the dependence and trust on the reliability and credit of human nature, and replace it with cryptographic evidence. The two most important cryptographic evidences used by Bitcoin, public-private key signatures and proof of workload, are the products of mathematics and physics. As long as its mathematical principles and laws of physics are not subverted, the credibility of this evidence is clearly much higher than the credit endorsement and guarantee of any individual or organization.
Only cryptographic evidence is not enough. Nakamoto will let the Bitcoin system overtake all human beings, so that no one person, organization or power can overcome the system, control the system, stop the system, One's own private damage to the interests of the whole people.
Nakamoto has completely eliminated all the technology centralization, logic centralization, economic centralization and human centralization in the Bitcoin system. By designing the game mechanism at all levels, the Bitcoin system has become a complete decentralization. A system that cannot be tampered with.
The decentralized approach adopted by the decentralized system based on the blockchain technology is to adapt to humanity rather than to humanity. Obviously, the implementation cost of the former is much lower than the latter. This point distinguishes the blockchain from previous traditional social governance systems (such as law enforcement systems, prison systems, etc.).
Therefore, we say that if there is a better accounting technique such as blockchain, it can open all the accounts of all the economic entities in the whole world, and then mix them together, no longer separate accounts. Then this account can make sure that we remember that it is all right, and once it is written, no one can tamper with it. This account is completely open, transparent to people around the world in this blockchain, anyone Can go to the audit, then, on the basis of such a better accounting technology, will produce a new form of production relationship organization, and thus, to a greater extent, hundreds of times, thousands of times the release Productivity, in the next 50 years, create more wealth than the wealth created in the past few thousand years?
Maybe the answer is yes. At least I am such an optimist.
The invention of joint-stock companies has lifted human productivity to a higher level. This kind of centralized and bureaucratic organization has its inherent vulnerability. Fortune has counted the average life expectancy of different types of businesses:
World Top 500: 40-50 years
Multinational company: 11-12 years
China Group Corporation: 7-8 years
Chinese SMEs: 3-4 years
Most of the users' careers are much longer than the life of the company and the project.
The vast majority of enterprises will not exceed a few thousand people, and a few multinational corporations and ultra-large group companies may have tens of thousands to hundreds of thousands of people, and hundreds of thousands of companies are very rare. why? Because an organization is like a living body, its essence is a dissipative system (Plygotsu "Time, Structure, and Fluctuation"), which requires continuous input of negative entropy flow from the outside to maintain its own spontaneous organization. Modern enterprises, this kind of centralized organization, its ability to resist entropy increases its natural boundary. After the scale is too large, it can't resist the internal disorder and entropy increase, unable to maintain its structure and organization, and then encounter the outside. The impact of changes in market factors will fall apart.
Professor Christensen of Harvard Business School wrote in his famous book "The Innovator's Dilemma" written in the 1990s that for improved innovation, always the giants and leaders win, but for subversive Innovation is almost always a mysterious star and challenger to win. The company never has the best organizational structure. Perhaps only the decentralization at the organizational level can govern a super-scale centralized organization. This may be an optimal solution to balance the centralization of institutional nature with the decentralization of governance needs. The optimal solution is actually considering the organizational flexibility and survival problems in the long-term economic cycle.
The essence of the centralized company system determines that the life of a product depends on the evolution of the leader's thought. The flexibility of the organization depends on their effective management. As a human being, its energy and physical strength are determined, and the radius of management is always limited. Beyond the field of vision, only the darkness of the scorpion, lurking with countless burdocks that are not afraid of tigers, will challenge in the future.
The Internet has made a new profession, product manager. Ma Huateng and Zhang Xiaolong are undoubtedly one of the greatest product managers in China's Internet industry to date. But they didn't dare to relax for a moment. Ma Huateng and Zhang Xiaolong not only created Tencent and WeChat, but also worked hard every day to overcome the unexpected challengers.
There is one person, but a greater product manager. He independently went online and retired, handed it over to the community, and the product continued to evolve. Thousands of people around the world self-organized and volunteered to join this cause; he set the top design ten years ago, and he managed to protect it for a hundred years. Change; he does not seek fame and fortune, has no dream of self-fulfillment, but has the feeling of achieving all mankind. He asked others to call him " Zhong Bencong ".
This year is the birth of Bitcoin for 10 years. Today, the blockchain of Bitcoin has attracted tens of millions of currency holders, miners and developers around the world to voluntarily devote themselves to this cause, tens of billions of dollars in hardware and software and electricity costs, and bear hundreds of billions of dollars in spot assets. , about half the market value of Alibaba. All the people involved are completely self-organized, not ordered by Nakamoto, and even more under the command of Nakamoto. There is no uploading of the bureaucratic management, no layer reporting, and no KPI assessment. The world's currency holders unite to fight for the Bitcoin business for life.
Bitcoin supply is halved every four years, and such a supply attenuation curve has its upper limit. In what year did Bitcoin stop issuing additional shares? It can be calculated by mathematics, probably in 2140. In other words, the “starting period” of the bitcoin designed by Nakamoto has been more than 130 years, which has far exceeded the design life of the world's top 500 and even some countries and governments. And this is just the life of the Bitcoin buds compared to the latter.
What is the concept of more than one hundred years? Starting today, looking back at the past for more than a hundred years, China is still in the early days of the Opium War. And the entire human society should be accelerated development, exponentially accelerated development.
So instead of the next hundred years, I think that in the next 10, 20, and 50 years, we should be able to see something very new in our lifetime. Maybe we are no longer stuck about which company we work for, but which chain I work for, which chain of digital assets I hold, which chain I contribute to, and get incentives from it. And return.
Global trade is no longer the same as it is today, but is dominated by thousands of tens of thousands of large multinational companies. All SMEs in the future may be global because they can trade globally on the blockchain.
This era calls for a thorough paradigm shift. As Professor Christensen said, it is necessary to abandon the dimension that the giant takes the lead, and choose another dimension that is perpendicular to it to develop, to counterattack from the side, to change the lane, and the new dimension has to have the old dimension. The inherent contradiction of interests makes the giants unable to follow up even if they see and see clearly, because they cannot actively sacrifice their existing businesses with advantages.
What is this new paradigm? This is the issue that entrepreneurs in the next decade focus on to explore and answer.
In February of this year, Alex Tabarrok, a professor of economics at George Mason University, pointed out in the article "Hayekin the Machine" on Marginal Revolution University that blockchain is an institutional technology that not only coordinates and governs decentralized humans. The economy (as the government, businesses, and markets do) can also coordinate and govern decentralized machine economies (and human-machine economies ), thereby expanding Hayek’s so-called exchange order (catallaxy). That is, the spontaneous order of the market. He called this "nanoeconomics."
Professor Tabarrok concluded that a smart contract platform like Ethereum provides a skeleton for such a market-based computing architecture. Naturally, his remarks were highly praised by Eitafang founder Vitalik Buterin, also known as V God.
On April 30, 2016, the DAO project, the largest crowdfunding project on the blockchain in Ethereum, started crowdfunding. The project token DAO, the crowdfunding time is 28 days, the token price is about 100 DAO to 1 to 1.5 Ethereum. The DAO project raised more than 12 million Ethereums, accounting for almost 14% of the Ethereum at that time, when it was worth more than $150 million and more than 11,000 people participated in crowdfunding. This grand occasion is far beyond people's expectations.
DAO, the full name of English is Decentralized Autonomous Organization, decentralized autonomous organization, is a concept proposed by V God. This decentralized organization relies on smart contracts to run on the blockchain. Without a legal entity, we can understand it as a "decentralized company." The DAO is a crowdfunding project initiated by blockchain company and is the first DAO demonstration of the community's high hopes.
Unfortunately, the good times did not last long. On June 17, the hackers used the two loopholes of the discovered DAO smart contract to carry out more than 200 attacks. A total of 3.6 million Ethereums were stolen, exceeding the Ethereum raised by the project. One-third of the total number of purposes.
The entire Ethereum community was stunned. The number of ethers raised by The DAO project accounted for almost 14% of the total Ethereum at that time. This number is too large. If there is anything wrong with The DAO, the entire Ethereum network will suffer, not to mention the Ethereum Foundation is also involved in The DAO project.
V God made a tough decision: hard forks to roll back Ethereum. The difficult decision to be criticized for central decision-making also directly led to the fork of the Ethereum community and the Ethereum main chain. On July 20th, the hard fork was successfully implemented. Since then, the world has an etheric classic ETC and another new Ethereum ETH.
After a long period of time, recalling this matter, V God revealed his heartfelt feelings, and he regretted the decision to make a forced hard fork back.
The DAO project has disappeared, leaving a painful experience for the entire blockchain world. However, the concept of DAO has since gained popularity. However, The DAO incident also made all communities realize that there is still a lot of problems to be explored and solved around the blockchain to establish a new organizational governance form that can replace the modern corporate system.
Today, most of the proven business models in the blockchain industry are centralized (such as exchanges), which highlights the road to decentralized organizations. However, we have seen the road and the dawn from some up-and-coming DeFi projects, such as MakerDAO.
The road is long and it’s a long way to go. Because the future has come, an economic and social based on lossless value storage , frictionless finance and borderless organization , is a beautiful new world.
500 years ago, Luca Paccioli invented the double entry bookkeeping method. ( booking technology leap )
400 years ago, the modern company system was founded. ( production relations leap )
300 years ago, the industrial revolution. ( productivity leap )
After 300 years, human GDP exceeded the sum of the previous millennium GDP.
In 2009, Bitcoin was launched. ( booking technology leap )

What will happen in the future, the only thing that limits us is our poor imagination!


We will continue to update Blocking; if you have any questions or suggestions, please contact us!


Was this article helpful?

93 out of 132 found this helpful

Discover more


Bitcoin: Riding High and Making a Splash in the Digital Ocean

Bitcoin (BTC) starts the week with a slight surge in trading while there has been a rise in activity on L1 chains.


Lugano, the Crypto Wonderland of Switzerland: Embracing Polygon with Open Arms

Lugano Embraces Polygon Revolutionizing Crypto Evolution with Layer 2 Scaling Solution on Ethereum Ecosystem


Bitcoin Price Predictions: Peter Schiff’s $10 Million Forecast and the Bitcoin vs Gold Debate

Renowned economist and avid supporter of Gold, Peter Schiff, offered insightful commentary on the current state of Bi...


Tech company MicroStrategy recently purchased Bitcoin worth a staggering $615M. The move proved to be a smart investment as their stock, MSTR, outperformed BTC by a ratio of 21.

Experts are considering MicroStrategy's stock to be comparable to a highly beneficial leveraged Bitcoin (BTC) ETF bec...


Satoshi Nakamoto: The Anonymous Genius Behind Bitcoin

Gabor Gurbacs commended Satoshi Nakamoto's decision to step away from the spotlight after creating his invention as o...


Argentina has suspended tax concessions for cryptocurrencies in a comprehensive reform bill.

The reform bill in Argentina no longer includes the provision for individuals to disclose their undeclared cryptocurr...