MACHINE PLATFORM CROWD Harnessing Our Digital Future Andrew McAfee & Erik BrynjolfssonCapi © 2017 by Andor McA an rik Byline Fpl «Nor ppc 2018 For information shou emia wpe keto fe thio eto Remisos, W.W. Norton & Canary, ln 500 ih Avene For infomation supe dca fr bk prhases, placa [W.W.Naron Spec Slt pierces 82554090 Manus LSC CmmusictosHaronbug Book digs by ono Sei Prdution manger la Drain by of Coors Catgng ia Pian Dae Names MEA. Andre att | itn, a uh “ile: Mace lm cond haresing oe dig ie ake MARS & Erk Bon, Desspin Fine | NewYork W.W, Narn &¢ Comp 2017) Tec bibogeaphl fecal eis: LCCN 201701658 IBN 97809935429 harcore) ‘Stbjs LCS: tnfocmution echlgy Eric pce arson tehnalog—Sodl up| Emo derapnn Teco Clio: LOC HETRIS Mah 217 | DOC 303448323 TC rece arabe a pc oc go 216682 ISBN 97.0395 35069 ph 500 Fh Aven, New Yn, NU 1110 W.W, Nero Copy 1S Calle See Landon WD 385 L2s4se7r8o0 othe MeAlees of Bethesda, Maryan! ‘Thanks for leting me keep some of my money sme ofthe ime atthe poker table Analy Tomy mother, Marguerite ‘whote smiles, lve, and unshatabe faith keep me gong Erk (rrTHE DREAM OF DECENTRALIZING ALL THE THINGS The foedom ofall seen omy freedom, ski Bakunin 1871 «an greatly influence the would. We recently leaned that anonymous hackers can too John Maynard Keynes, himself an economis of immense inf ence observed in his 1936 masterpiece The General Theory of Empl iment, Imers, and Money that paca men, who believe ehemscles ‘0 be quite exempr fom any imalleetual influence, are usualy che shies of some defunct economist. Madmen in authority. who heat voices in thes aredsiling ht recy frm some academe sib ‘er fa few years back. Lam sure cae the power of vested interests vasdly exaggerated compared withthe gradual encroachment ofideas” “Todeed” Keynes wrote, “the woud s ruled by lil elie” Keynes saw chat the ideas of prominent "werldly philosophers™ “Rae Mani hi sis ini 93 nk Te Philp: The Lives, Tier and Lea of the Great Economic Thinker, * like Adam Smith, Karl Mars, David Ricard, Frcdrch Hayek, and Joseph Schumpeter reach far outside the discipline of economics “They change how people think about Faienes and juste, how com- panies organize dhemslies and innovate, bow goveraments approach ‘aration and wade, and so on. Economists think about exchange, 2 fendamencal and universal human acviy, so thee bigges ideas on she subject have had a huge impact. Bitcoin: fhe Pseudonymous Revolution Satoshi Nakamoto idea have also ad a huge mpac, even though ‘body knows who he o she i” On October 31,2008, a person of up going by tha name posted online a short paper ied “Bicoin: [A Teerto-PeerBletronic Cash Sytem.” Ie addressed strightor- ‘ward question: Why do online payments have to involve bane, cred ‘ard companies, and other fnantal intermediaries? Why ea they be like cash payments inthe physical work? Cash ransacions have two attractive properties there are no Fes associated with them, and they preserve anonymity you are unaly not asked for your ID when you pay cash. Physical cash is also durable and reusable keeps ce culating droughout ou economy, being use to pay for things over and ot ‘Governments have nor yer shown much wilingnes to create die et a ec ae eB \etnoe shut Bsn eae cha oe lilo BTC he ‘ec dng sone wrth oe $60 mila y Sep 2d eran te ainoe Peal he Bic cliodlrs us yen mini nd on So Nakao prop withconsidnbl amon, ocean ete sodomy independent dig carey cll Bin. Besta iy on many of the same sloth nd at cnt wey phy he ar and cece of making and beaing cate), Bac come tobe navn aeypouneny” Amen dl pen ye. Tish i, Nig in, anal heer money ey nations rund the we, eae alld cece Becase hey y great od Bi ron erent sing declare them co be legal cender-t ” sing combinations of ey” code and math Nak sow svete ugh pm of ienting whe owes Bec 2 they gu wed oe time an alt the nb opp chy fr hing Parcpane wold eth dial siguus rng eon sen ove th ig unt of Bsn fm chug oer Dial sinrres have een ound fr whl ane Laon woke Thy cu or anyone geet td ey sy had so frgand“prdony spoon cal yer dp a sas witht elite Hetty. As Bec ansetos append Nakano pops ey wlll bed nse gta loge xy ich on ere pean sh dn, yous ie ofboth he ayer and he sel, sed by the as * Sone natal gneve begun akin dig The Bak of Engh camp ha nnn th ating" sgn noc “phan ne wth rca sans ee Richard Nowa, thar converted dollars to fst currency. ‘ Pent How Do We Get This Information to Stop... Behaving like Information? able ledger was esenial fo the Bcoin A vaiver, easly con system i order wo deal with the “double spend problem" This prob Jem arses because icons are purely and oly pices of informacion, yet ts easel che chey not al fallow the ee, ptf and instant economics of information goods chat we discussed in Chaper 6, IF Bicoins could be fel, perfec, and instancy copied, forgery would be rampant. Bad actors, proectod by ther pseudonyms, would spend the sme coins over and over unl chey were caught, merchants would ge cheated rust would evaporate andthe system would very quickly collapse: A trusted, univers accesible online lege woul sole the dow ble spend problem by enabling merchants fr anyone es) o verify shat a prspecive buyer ataally has the Bitcoins they say they do, and shat eey haven heen already spent anywhere ds But who should be responsible for creating, maintaining, and ensuring the intesty of this ledger Ica be a ak or eed card company, or combination of them, because the whale point ofthe system proposed by Nakamoto is chat ic woulda rey all on existe ing nancial institutions. Or on governments: the Bitoin system ceded to operate ently independent of them, In fact had to operate in completely decentralized way—unreliane on any core set of cnganizaions of inscztions and able wo survive and thrive ‘1 mater how its participants change overtime. Bus how on Earth could his philosophy of radial and permanent decentralization ever be recneled with the absolute need fora single, permanent, univer sally cused ledger? By another ingenious combination of math and programming, combined with healthy dose of selFinterest, Nakamoto proposed an onlin system that would work as lows|. Ascach transaction becween buyers and sles happens, eis broads hroughow the system, 2 Speciale computers calle “nods” peso ello all ‘he eansactions and verify that they imate bj backing, thatthe Bits involved were’ previ spent eaewhee ‘The set of ood transactions over 3 period of time is eal & “block” 3, Ache same ime tha theyre doing this work on teansictions, the node are alo involved in a competition with cach ocher, consisting f tying to fnd a short metic summary, called “hash” ofthe curen block, The Bist node to finda hash of the rgh form wins the competion Finding the ight hash is ‘caband-eror proces it taka lot of computational week nd socalled “proof of work” The more comparing power ‘node asthe more key ita be these ro complete thie ‘ask The proof of work i inlaed inthe Hock in sucha way "har inorder vo change the Hacks contents, another node ‘would have o redo al ofthe work, ‘4. "The winning node—the fst one succesilly complet the roof of work—broadeass is jusfinished Hock ehoughout the sytem. As is reward ici allowed to create and keep for ‘lf «predetermined numberof Bicoins.” The ection of "hese Bitoni isl eon in the block, Th oa vas et 0 Bacall 25 in Nove 2012 ano 125 in ane 2018 Th proces kaon hig: happens ny 20.000 Sede as bl no th Biz wfnae. Te wil ba metus ays a ‘np ing al 2 ale Bein fe hich ow mel cae ad ‘ony. “Wha he Hang? AD Bical Bh Mnng Chap Ca ene 12, 206 pte miking se hte aka) A 5, The other nodes double-check this lock, erifping that all she transactions contains ae lgimate, athe prof of work “They have ample incentive ro do this because if they finde ‘mate ansctons oan incorrectly done poof of work the ene block i invalid, which means that ts asocated Bicone ae sil up or grabs 6, Once nodes convince themselves chat a block score and complet, they sat puting together the next one and catty ing ou its proof of work and che etic Block creation pro- cess starts over agua, Nakamoto designed the sytem that {new block woul be created and Bitoins awarded about very ten minutes, Nakamoto noted that the steady addi- tion ofa constane amount of rew consi analogous to gold mines expending resources toad gold t circulation” The analogy suck, andthe people and organizations that man- aged nodes around the word came 2 be known as Bicoin This Ting Might Actually Work Many eas Nkam' pecan slo a heen ede cad acl end oleae The ath tnd ogumming se wu. Movers 0 che oe ‘miners could conduct their activities without coordination andi ly, motel yt ee fr Bais ad es in Ben dee Kw Bair now macho ca ie (ielorertine nec eo dar, xo eto te ny el he rift peans which eh igh gy nt more me Siymeke Wen ny one evowicedn pineal ‘evo bpeindn‘ot rally sri or community spr, and che sytem woul il ‘ccomplish kx gols an grow oer ime, Bitcoinparcpant would noc ned o coordinate with eachother they'd only ned to broadcae ‘heir wansactions and completed Blocks, In fc, it would be betes the miners didn’ coordinate with cach other, because coordination ‘ould precy easy and quickly eur ine collusion: group of mince ‘sting together and, for example, alerng the hore recond te ‘make all he Bicoins belong to ther, Nakamoto biline design offered two main defense agains such attacks, The fst isthe roof of work: the computaconaly imtensive task of coming up with the right hash for cach block. Ic {5% exponentially harder with each new block, and the Macks are mathematically chained cogecher o that attackers wouldnt jst ned ‘0 ro che proof of work for the Black they were interested ins they would instead need to doi for every block in the chsin—in other words, for every block ever created, Because the block are inexerie, biy linked, ve complete historical cord ofall ansacions ical the "bockshai.” ‘The face cat the proof of work keps geting hand has another Important effect. The amount af computing power needed eo “take ‘over the entre Bicoin system" keeps growing eapdneatially oer time, and quickly becomes uneconomical. Many miners found it ‘worthwhile wo keep investing overtime in specialized mining hard. ae in hopes of winning the blockby-block competition for Bit. «ins. To tke over the whole system, an atacker would have to ‘uvpend all che rest of them pu eogethee ‘The second main defense against acacks on che sytem is chat ‘hyd be inherently self-defeating. If the people and organizations {Acti oi ot he Bin em ying mr th 5 fe ‘tocando eee et Jmzerested in Btcoin came wo beieve tha the sytem had een taken ‘vee by bad actors, they would quickly love interes in it and move fon co other projects or payment methods. Bicoins would then iqickly lose value. So why would ateackers spend all the money required to take over the entire blockchain, only see the aset they had chercby acquired—a huge trove of Bicoins—rendered worthless? le would make no economie sense so the only attack cers to worry about, it appeared, would be extemely well financed iil, ora leas those with some more subtle, complex incentive for controling the blockhain." Nakamoto reasoned that cheze are ot very many ofthese, or atlas tha they would be substantially cutnumbered by Bitcoin partcipanes who want cose cei assets appreciate In shots, the blusprine tht Nakamoto rie paper aid out loked workable; i was both echnically feasible and economically sound Ital appeatd i ae 2008, time when any people around the ‘word were losing faih in the existing Gnancal system, fom moet ge companies o central banks emsles. The bankruptcies, ball ‘outs, and other dislocations ofthe Great Recesion convinced many ‘har the global status quo was unl unsustainable, orboth. The idea of new currency independent of any andl government appealed ‘to many, So dd she posible of making mone, ofboth the old and ew vais, Conons were spe fr interesting things o happen. Many di > In May 2010 Lasso Hanyec, a programmer living in Jackson- ville, Florida, posted a tequesc ona Bitcoin foram co ade 10,000 Biccoins in exchange for “a couple of pizzas” Four days later, Cpl ea lange oe, can te ae ml omensigheen year-old Jeremy Sturdivane accepted the offer and pun chased the food via the Papa Johns webs. This was the fg known rade of Biesin fora physi produc nd pve che ling currency vale of about 8.003 pe Bien since Sturn id $30 fr the pizza. Ihe hd kep the Bitcoins chat he recived in exchange for his food delivery, they would have been woreh ‘rer $83 milion by mid January of 2017, >> As Bitsins gained in popularity, mumezous maskeiplaces appeared to facilitate cading them. These exchanges enabled people to sreate orders to buy or sell Bicoins fora certain price, usu. ally denominated in fat currencies lke the US dalla or Bric 'sh pound. When che condivions of both the buyer aad seller ‘were met the trade was executed. The largest and most inf ‘mous ofthese exchanges was Mt. Gos, a Tokyo-based im chat accounted for 809 ofall Bitcoin trading ais peak, Me. Gow vas plagued with dificuldes from the time i was founded Including alas one major hack that resulted in low of $8.75 million in 2011, Despite chiseyberhe, Mt. Gos continued vo s3in momentum until February of 2014, when management lancovered a security Baw chat had left it exposed for several Yeats. Mt, Gox suspended trading, closed the website, and fied for bankrupcy after confirming that che exchenge "had weak ese in ts system and chat “bitcois vanished" At ehe time ‘ofthe collapse, toa owes were approximately $470 milion in Bicoins and $27 milion in cash, > When Bean at emerged, che wok of mining, hough com utasonally intensive, could be done sing open-source sftware and personal computes. But the proof of work required for sue, ssf mining becomes exponentially difcule wih ech succes sive block, The result has ben sharp ise ine cle of resoures capability ofthe being deployed. By January 2015 the processing capabiicy Bitcoin necwork was 1,000 times grater than the worlds 500 most powerful supercomputers combined. In thee search for cheap electric, sucesfl mines sec up operations in, among. ‘many othe places, Iceland, Washington Stace, and Inner Mon- tla, Soon a market developed for specialized computer chips, ASICS (application specie integrated circuit), optimized for Bi sia mining Resale nor fhe Bicone sofa might be at ofan Howell We chu pons who ban ing Be sn 209, he thy eal fie te bh ad I or ova. Hedman he compra wed mining afr sling atk on. The god neve what he Kept har ive, wich oid he only cd fl cin in we, The dno th be thew the de trey dating caning in 2013. When eer ews Tsou the pice of Bis a ht en he eed hs evs mining, ale what had done a we he him thee ash, Te manages hi har he ad Gave would mos ily be bud unr sve ffi setae thse ofa fall en gh he 7500 Beso he adit ee a ine wrth bok $25 illon Hove did oc mune seh ei The mines and tes who ul se Bila ewok wth fun rin. ing st Keys ad pce, bt with me fing ‘hey wet mime. mt of em err fn ahr ba Shee ll dling sey” oon exe nb Ber bred fn» peuonymon en Sh Nakao2m macnine | pLarFom | caowe The Ledger, Not the Currency: Waking Up to the Blockchain’s Potential Throughout this time, mose mainstream economists were skepi cal even dismissing, of Bitcoin’s potentials a rival e the world’s ‘sublshed currencies. Two of the main functions of ary money, they pointed out, were a means of exchange (I ge you these da lars or euros or yen and you give me that house o car or chicken inne anda store of value (ny tral act worth is X dollars, euros ‘or yen with this amoune of welt I can buy so many houses, cars, o chicken dinner). For both ofthese Functions, stability of the currency is ral n order to guide thelr actvces and plan thei fares people need to know thatthe purchasing power oftheir ‘money will emain relatively constant, ort east chat wll change ta predictable re, Bus the value ofthe Bitcoin, as expressed by its xchange rate gains currencies ike the dollar, Bucrusted wily ising to a high of ove $1,100 in November 2013 before plusmeting 77% eo les than $250 in January 205 and chen recovering to mote than $850 ‘wo years ltr This voltity made the digital curency interesting for ristolran investors but unsuitable as a minstcam means of exchange or stot of vale While the debate about Bicon'sabiliy to ever be a rue curency ‘was unfolding, a small group of people began to make a different pine thatthe cruly valuable innovation was aot the new digital ‘money, but instead the dseibuted ledger chat rested on. Ie was the DMockchain tha really mated, noe Bitcins, Bircoi’seamultuos history was evidence thatthe Hockchain «ould actually work. For year, fnetoned a designed a com Pletely decentralized, undirected, apparently immutable record of transactions” The sransactions it was oxginally intended to record vet limited to the mining and exchange of Bitcoins, but why stop there? The blokchain could conceivably be used to record all kinds of things: eranser of ownership, o “ile,” of a piece of land the issuance of a company’s stock to a group of people: the fact that both the buyer andthe seller of an office building agreed that al the conditions of the sale had been met the name, birthplace, and par ents of a baby born in Hawai and 0 on. All of these events would tbe universally visble—they would be el publi reconds—and they ‘would ako be undeniable and unakeabl, no mater who wanted to rewrite history “This would eraly be something new under the sun, and ie would truly be valuable, The blokehai operated for years, under intense sccutiny and sues testing, a global, ansparen, immutable led gt accesible to all onthe web with zero entrance, partition, ‘or ransiction fees Ie existence opened up many posits, and ingovaors and entepreness Soon begin exploring them rion School ‘The Univesity of Nicosia in Cyprus and the Holberton Seb of Software Engincesing in San Francisco were cal examples of academic institutions using the bloskshain to share cerled stu dent eransripes > The Kimberley Proces isthe UN-suppored organization that manages certification intended to zeduce the umber of con- Bcd peer ‘rower Bois ai ac pa he WedAlice diamonds entering the market. tas tsdonaly relied on paperbased certificates of provenance, but in 2016 the body's chairman reported cht they were working ona blockehain pile to understand how dhe immutable ledger can improve thei exist ing system. A Londow-baed startup, Everedge, is using smi lar technology o ceely prio snes for consumer insurance Purpose. Customs officials seized $50 milion of counter shoes ene ing the United Sete in 2014, «smal fraction of che $461 bil liom of fake goods that ae waded internationally every yea. To Prevent against this type of ead, shoe designer Greats released its Beastmode 2.0 Royale Chukkah collection ia 2016 with 2 ‘lockchain-enabledsmar tag that enables enthusiasts to confirm ‘the auceaticty oftheir sneakers wth ther smartphone. Patrick Byme, CEO of online eile Overstock com, has been a blockehain advocate snc the eatly days of Bitcoin. Overstock became the irs major ecommerce store t accep the dial eur rency, in September 2014 Byrne went on to create a subsidiary, “TO com, chac uses blockchain eo tack the exchange of financial asses. The mame comes from che fact thc tades onthe platform sete in ero days as opposed to thre days later (T3), which is the norm om Wall Stet. Overstock used TO.com to offer $25 million incorporate bonds in June of 2015. In March of 2016 announced it was making a public ofering of prefered stock, utlizing blockchain, Both ofthese were world fest Ts October of 2015, Nasdag launched Ling, solution enabling private companies to digtally cord shar ownership using block ‘hun technology. Alhough Ling ntl Facased on private com Panis, Nasdag belive similar system could be us in public markets, edcing setlement rk exposure” by over 9086 a8 well 28 dramatically lowering capital cost” > Whea Otnua, an Irish agriculeual food company, shipped $100,000 worth of chese tothe Seychelles Teading Company in Sepeember 2016, was the fst international cade teanssc- tion that used the lockchain to recor all deals of ts wade financing, Trade across borders typically does happen wail wo conditions are met. First the partes invlve ave ironed ou all “duals abou the rade financing: insuring the goods while they in tran, Kdenlying exactly when ownership istransferred, and so on. Second all nvoled partes have said themselves that they have reccved idensical sets of propel signe legal doct- ‘ment elated to ths Financing, Postingall documentation forthe (Omnua Seychelles Trading sansction on the blckchainrodoced a seven-day process four hours > In June of 216 the Republic of Geosgia announced a project ia conjunction with economist Hernando de Soro to design ad plo {blockchain-based system for land cde registry in the country. I Tsexpected that moving clement ofthe process onto the block chin can reduce cots or bomeowners and other users, while aso recing possible for corruption since the land records, like ‘everything else onthe Blckehain wil be unalterable. Why Not Get Smart about Contracts? [Asi became appaent thatthe blockchain cou be use o record all kinds of transactions, nt ust chose elated co Bitcons, ic a0 + semen kn the pos hoe ie of he ent igh oo det ‘hen pri neh hes ary al for chen oebecame clear to some that a disuibuted ledger was ee ideal home for dial “amare contact” Tis wa a phrase coined jn the mid 1990s by Nick Stabo, a computer sientis and legal scholar” Srabo observed that business coneracts, one ofthe foundation of mod- en capitalist economies, at simile to compute pogsans ia many ways Both involve clear definitions fin programs, of viable; in ‘contracts, ofthe partes involved and cei oe) and both specify what will happen under diferente conditions. A contract beewsen ‘book authors and a publisher, for example, mighe specify thatthe authors wll eeve a specified payment when they deliver the man- scrip o the publisher, and thatthe royals paid tothe authors wil inctese i otal hardcover sles past a certain level. Any decent programmer could write the equivalent ofthese conditions in afew Tins of compuser cade Buc so what? Even ifthe two of us wrote our contact with Norton (he publisher of his book) inthe form of a program, its ‘ot clear how this would be beter than the standasd paper-only, word-based contact. Woulda we sil ned our editor co cll his company’s accounts payable department that he'd ecived che man usr, and chat we were therefore dea payment? And woulda we ail need accountans at Norton t9 monitor sales and send us royalty checks? And coure to sectle any disputes we couldn’ resolve ‘ourselves, or to determine which vesion ofthe contract was the igh” one if (ther shrough honest mistakes or tampering) we hc a contract that said one thing and Norton eld one tha sud another? Most fundamentally, dont we and the publisher really need to havea prety high level of east—trust that che other party will be honest tespect che terms of the contact and not engage in bad bshavior| * Manele ht Sub a, Sabi Noam, He at psy denied ‘Wed tust Norton alot but that’s largely Because we've already published one book with them and had a grea experience with it ‘An we decided to dose ise book with them in lg part because ‘hey ve been aroun lng ime, have an exellenreputaion, publish authors whom we reper greatly, and came highly recommended by ‘out leary agent” There wee ale of signals, in short, that Norton would be a trustworthy parener for us! “Advocates of smart contracts would look at eis sation very dif fexendy. They would nore that, instead of esting Norton to accu racly report book sales tou, we could instead ely on chi partis ike Nien BookScan, We could then write a program that would access the web, BookScan and Norton's bank aecount and our bank accounts, ad would have the following ogc: > Present a webpage othe author and the eis, asking cach to lick ona button to certify thatthe manuscript hasbeen subi ted, Onceall parties have clicked cis button, transfer ands frm [Nortons bank account to the auhors. > Begin monitoring hardcover book sales using BookScan, If hard ‘cover sales pats certain number, increase the royaky rte in all fuure payments authors. ‘Any aerual smareconract between us would obviously be mot for salad complicated than this, bute woulda need any esoteri data lor code Ir would be easy 1 wrt ‘Bue whac about che prenil problems of having mukipl versions ‘ofthe contacto of tampering with This is where the blockchain + Our ney gt emi ory Raph Sop 4 Thr wee ee siglo Narn tha vo fw wold be god auton hem och, ete pal ht ey aca| | | ‘comes in and offers an appaenly ideal solton: afer we and Norton ‘ge onthe contract, we spl sgn it with our digital signatures and add othe blockchain The conrace then asl he sme prop. «ces as all he tansctons reozded in tat ledge. les permanent permanently there, visible and verifiable. Mosc important, it's immtable nekher ‘we nor Norton nor anyone ele ca tamper with i afer the fae ‘We'd probably wane to include the abily to eenegociate this sare Bison shoes the potential of completely decentralized comeu- nites. By combining math (cryptography) economics, code, and rnecworks, they ca creat something as fundamental and critical ss money. > ‘The blckchainanght well be more importane than Bitcoin es ‘pea, sansparen, global, exible, and immu ledger iclearly valuable, especially iis combined with smare contract and other Aig innovations, > The mose remarkable thing about Bicoin and the blockchin might be how they enable a global crowd of people and organi ations, all acting in thee own iors, to crest something of immense shared valu > Bicon and che blockchain have sparked a wave of innovation and ‘otreprencuhip, and it no tall clear now what sles hey venuslly ply in economies and societies > Some people belie that large ongealzations, fom banks tech ology companies, have become too poweeul, and thar a viableatenative wo them now exists because of the new technologies of cxteme decentralization. any iniatvs indicate sat eheze's lot of demand for new ede te technologies. That may make many existing busines processes ‘cheaper and faster and, perhaps more imporane enable new ones Questions How mightan open, eansparent, global, sible immutable led gerbe valunble co you? What kinds of documents, records, or ‘runsetons would you putin? What parnere—customirs, p= plier, third paces, government ens, and so on would you have jin you? How much tie and money do you think such a ledger cou save you? ore fori be valuable to you, would eis ledge lio need to be radically decentralized, o could it be owned and controlled by one ae more organizations? How importan might Bitoin and other exyptocurtenccs be to you? Ace you planning accep hem as payment? ‘Whac would be the ise “smare contracts” (contract tha execute 100% aucomatical) you would atempeco write? ‘Where if anywhere, do you think massive decenerazation will upse the core and replace emily or largely) with a czowe in the nex five w ten years? ARE COMPANIES PASSE? (HINT: NO) they can mk, Not enough people see i et 6 to Winton Chri 174-1965) eed companies? Many observers assert tha eal alenatives to co nies are now available. These aernaives make use of many ofthe Algal innovations described in this book, especially the radially decentralized rows-based technologies of erypocurences,dstib- sed ledgers, and smart contracts tha we described in the previous chapter Companies are squarely atthe core of modetn capitalism, but at we've shown repeatedly theoaghour chis ection of che book, the coz can often be beste by 2 echnagy enabled crowd So, what wil happen to companies? To stare addressing this important question, le look at what has teanspited with owo recent efforts to subattue a crowd fora com pany: The DAO (a“decenalized auropomous organization”) and the Btcoinvblockchan effort. The recent histories of thee two specific efforts, when understood in igh of relevanc economic theory tll us «great del about the Future of companics in general