The most mind-blowing article in a while. You could, in principle, implement the whole decision-making and money-handling apparatus of a national government over a cryptocurrency, making it as transparent and easy to inspect as you wanted to.
"On top of second-generation blockchains like Ethereum, it will be possible to run so-called “autonomous agents” (or, when the agents primarily serve as a voting system between human actors, “decentralized autonomous organizations”) whose code gets executed entirely on the blockchain, and which have the power to maintain a currency balance and send transactions inside the Ethereum system. For example, one might have a contract for a non-profit organization that contains a currency balance, with a rule that the funds can be withdrawn or spent if 67% of the organization’s members agree on the amount and destination to send.
"Unlike Bitcoin’s vaguely similar multisig functionality, the rules can be extremely flexible, for example allowing a maximum of 1% per day to be withdrawn with only 33% consent, or making the organization a for-profit company whose shares are tradable and whose shareholders automatically receive dividends. Up until now it has been thought that such contracts are fundamentally limited – they can only have an effect inside the Ethereum network, and perhaps other systems which deliberately set themselves up to listen to the Ethereum network. With obfuscation, however, there are new possibilities.
“Consider the simplest case: an obfuscated Ethereum contract can contain a private key to an address inside the Bitcoin network, and use that private key to sign Bitcoin transactions when the contract’s conditions are met. Thus, as long as the Ethereum blockchain exists, one can effectively use Ethereum as a sort of controller for money that exists inside of Bitcoin. From there, however, things only get more interesting. Suppose now that you want a decentralized organization to have control of a bank account. With an obfuscated contract, you can have the contract hold the login details to the website of a bank account, and have the contract carry out an entire HTTPS session with the bank, logging in and then authorizing certain transfers. You would need some user to act as an intermediary sending packets between the bank and the contract, but this would be a completely trust-free role, like an internet service provider, and anyone could trivially do it and even receive a reward for the task. Autonomous agents can now also have social networking accounts, accounts to virtual private servers to carry out more heavy-duty computations than what can be done on a blockchain, and pretty much anything that a normal human or proprietary server can. [...]
“Much of the time, organizations are bound by rules which are really little more than gentlemen’s agreements in practice, and once some of the organization’s members gain a certain measure of power they gain the ability to twist every interpretation in their favor.
"Up until now, the only partial solution was codifying certain rules into contracts and laws – a solution which has its strengths, but which also has its weaknesses, as laws are numerous and very complicated to navigate without the help of a (often very expensive) professional. With DAOs, there is now also another alternative: making an organization whose organizational bylaws are 100% crystal clear, embedded in mathematical code. Of course, there are many things with definitions that are simply too fuzzy to be mathematically defined; in those cases, we will still need some arbitrators, but their role will be reduced to a limited commodity-like function circumscribed by the contract, rather than having potentially full control over everything.
“In the developing world, however, things will be much more drastic. The developed world has access to a legal system that is at times semi-corrupt, but whose main problems are otherwise simply that it’s too biased toward lawyers and too outdated, bureaucratic and inefficient. The developing world, on the other hand, is plagues by legal systems that are fully corrupt at best, and actively conspiring to pillage their subjects at worst. There, nearly all businesses are gentleman’s agreements, and opportunities for people to betray each other exist at every step. The mathematically encoded organizational bylaws that DAOs can have are not just an alternative; they may potentially be the first legal system that people have that is actually there to help them. Arbitrators can build up their reputations online, as can organizations themselves. Ultimately, perhaps on-blockchain voting, like that being pioneered by BitCongress, may even form a basis for new experimental governments. If Africa can leapfrog straight from word of mouth communications to mobile phones, why not go from tribal legal systems with the interference of local governments straight to DAOs?”