Centralized vs. Distributed Organizations (DAOs) :
So to begin with, what is the major difference between a centralized vs. a distributed organization(DAO)?
A centralized organization is one that has a top-down approach for all the decision-making, there are many examples, and almost all the companies built after the industrial revolution follow this approach- CEO, C-Suite, higher management, leaders and managers, team leads, seniors, ICs, Associates, Interns.
As per Vitalik Buterin (founder of Ethereum), a DAO is:
[…] what if, with the power of modern information technology, we can encode the mission statement into code; that is, creating an inviolable contract that generates revenue, pays people to perform some function, and finds hardware for itself to run on, all without any need for top-down human direction?
A famous example to understand why distributed organizations/networks win in the long run is the rivalry in the 2000s between Wikipedia and its centralized competitors like Microsoft’s Encarta.
Theoretically speaking, If you used the two products in the 2000s, Encarta was a far better product, with better topic coverage and higher accuracy. Whereas Wikipedia was still a work in progress product.
