Interviewed: Joel Dietz on Distributed Collaborative Organizations

Summary

Distributed Collaborative Organizations use blockchain technology to achieve participatory governance. (Swarm)

The category of computer code known as blockchain technology has already revolutionized the world of currency exchange, as evidenced by the steady rise of Bitcoin and other “cryptocurrencies.” Now a group of technologists and entrepreneurs thinks that it can do the same for collective organizations. Over a series of recent meetings at Harvard, MIT, and Stanford, Swarm‘s Joel Dietz, Greg Xethalis of Katten Muchin Rosenman, Primavera de Filippi (Harvard and LOVE), and Common Accord‘s Jim Hazard, among others, have begun to develop the definition of—and a user-friendly template for creating—what they call Distributed Collaborative Organizations, or DCOs.

As proposed, a DCO is built and operated primarily on a distributed network—that is, in cyberspace, where computer code rather than human intermediaries record transactions including the exchange of stock-like tokens. Unlike other blockchain-based organizations, including currency exchange networks, DCOs are explicitly designed to allow users active, and possibly democratic, participation in the group’s management and operations. Finally, and crucially, DCOs are structured to fall outside the understood definition of a security under United States law, thus avoiding potential regulatory interference. Because of the minimal cost associated with setting up a DCO, the model provides an alternative to other, offline, corporate structures for groups that may not have access to conventional fundraising vehicles.

I spoke by phone to Dietz last month. Dietz outlined the definition of the DCO and how it differs from other organizations built on distributed networks, and talked about a few real-life examples including his own collaborative network Swarm. He also ran down some of the do’s and don’ts of setting up a DCO—something anyone can do, right now, using Swarm’s new staging server.