How can blockchain disrupt regulated industries and corporations? How can it bring an “organizational revolution”?
Today, Chinese blockchain economist and luminary Zhu Youping answered these questions in an interview with the Bank of China. The deputy director at the China Information Network Management Center outlined his views on the technology’s transformative power.
Corporate structures and DAO
Three years ago, the Decentralized Autonomous Organization (DAO) was launched on Ethereum. It hoped to use the blockchain’s immutability and consensus mechanism to create a fund controlled by its owners, not managers or directors. While a security flaw in its code caused a controversial hard fork in Ethereum, the original idea of the DAO is here to stay.
As Zhu explains: “The blockchain has created a DAO community through anti-counterfeiting and tamper-resistant data, strangers’ mutual trust, evidence-based incentives, and smart contracts.”
“In traditional enterprises, leaders and employees are in a sense of a game. The former wants employees to work harder for less wages. The employees hope that they will work less and get more wages. But the blockchain breaks this game relationship,” he continued.
“Through its intelligent contract mechanism, the target is set up, the benefit distribution mechanism and the incentive mechanism are set up, and self-organization cooperation can be realized. This has become a new production model of a new wealth organization, bringing about an organizational revolution.”
“In the future, all banks will become blockchain banks, insurance companies will become blockchain insurance companies, and stocks will become blockchain stocks,” said Zhu.
Indeed, by 2015 he was surprised that companies like Weizhong Bank were already researching it. Now, many leading banks, such as ICBC, China Construction Bank, Standard Chartered, and HSBC, have extensive work in the sector.
Zhu explains that blockchain allows…