6 min read
Opinions expressed by Entrepreneur contributors are their own.
For some, it is hard to envision that another crypto sector would command the level of mainstream attention that DeFi and NFT garnered in the last year. Even some believe that the contentious crypto industry is nothing but an overhyped economy fated to crash abysmally. It is clear that both factions have somewhat underestimated the potency of the underlying technology powering the crypto economy.
Blockchain as we have come to know offers dynamic solutions potent enough to change the way we live. It goes without saying that this dynamism is currently disrupting the financial industry in the form of DeFi. Who would have thought that the average individual can become active stakeholders of financial networks designed to empower the disenfranchised?
A similar innovative wave is currently sweeping the art industry. The prevailing theme is that we can eliminate restrictions and build universally accessible ecosystems where users have the final say in terms of development and everyday operations. It is only a matter of time before this possibility finds its audience in other industries.
Related: SafeMoon: New Dogecoin or Ponzi Scheme?
One sector where blockchain and crypto technologies could be as disruptive as anything we have ever witnessed before is the politics industry. The technology has the potential of enabling true democracy at all levels of governance through decentralized parties or what we may come to call DePa.
With this context in mind, this article will explore the possibility of blockchain-powered political parties, how they would likely operate, and why they are a building block for future political terrain.
What Is Decentralized Party (DePa)?
Just as decentralization is increasingly introduced to the governance of organizations and protocols, we can have systemic political parties designed to deliver the type of transparency and accountability associated with blockchain-powered applications. A DePa would essentially function like a decentralized autonomous organization (DAO) as the entirety of the protocol relies on predefined rules set in codes and launched as smart contracts.
Therefore, the protocol responds to the activities of users or verified party members based on its underlying code. And so, all operations are fully automated and devoid of the influence of third parties or central authorities. Whenever sets of conditions are met, the DePa executes actions that are in turn recorded on the blockchain and open for verification by any member of the party. In essence, DePa is a party that reflects the views of all its constituent members and not just the selfish interest of the few.
To ensure that the activities of each party member conform with the unified goals of the decentralized party, the protocol will incentivize positive contributions by distributing its native token as rewards. It is important to mention that the ultimate goal of the protocol is to achieve consensus and at the same time preserve the individuality of each member. The token accrued by each member would also determine the individual’s voting power.
At any point, the decentralized party would allow members to exercise their voting rights within the protocol and during inter-party decision-making processes. When it comes to decentralized parties, the most important thing is that all members have a say in governance as against the traditional method of electing and empowering representatives tasked with the responsibility of making decisions on behalf of citizens.
Why Do We Need Decentralized Parties?
History has shown time and again that centralized models of governance are parasitic. When the fate of a population is subject to the actions or inactions of a few political representatives, then there is no guarantee that the average citizen would reap the benefits of good governance.
Whatever way you choose to put it, it is foolish to trust another individual to adequately protect your interests. Decentralized parties ensure that each member voices and registers his/her views and thereafter watch how the decision-making process unravels on the blockchain.
Related: Tax Rules for Buying and Selling Bitcoin and Other Crypto
More importantly, such a decentralized political sphere is not limited to the geographical and racial boundaries put in place by governments and politicians to control us. The emergence of decentralized parties will usher in the era of borderless governance such that we are no more subject to the ills that come with political tribalism or segregation.
Note that it is completely normal for a small organization to run a centralized based governance model to implement the vision of its founder. But the requirements for running a smooth operation change when the organization takes on more regions and expands in size. A more robust and decentralized governance model becomes the appropriate choice to prevent the centralization of opportunities, power, resources, and ideas.
It is also proven that centralized governance is not dynamic enough to identify new trends and adapt adequately. Centralization slows down development and often causes the degradation of potent ideas. As witnessed in the workings of DAOs and DeFi applications, decentralized governance promotes active development. Anyone can suggest new ideas and have the entirety of the network vote on implementing or rejecting them. This is a more progressive approach than relying on a bureaucratic system where ideas lose their potency before they eventually reach the decision-makers.
Are We Ready For Decentralized Parties?
Without any doubt, the infrastructure and technical prowess required to create and run decentralized parties are readily available. Likewise, the increased demand for DAOs is a testament to the growing appeal of decentralized parties. For instance, the state of Wyoming will start recognizing DAOs as a limited liability company from July 1, 2021. And so, if the technology and the demand are there, what then is stopping decentralized parties from taking center stage?
As it is with a majority of industries, the stakeholders have significantly invested in traditional systems. Therefore, it takes some time to adjust to new realities and implement innovations that are entirely different from what we are used to. Remember that it took almost a decade for crypto to make a splash in the financial sector.
Similarly, expect the concept of decentralized parties to slowly creep into mainstream consciousness. Already, blockchain is increasingly being used and tested as an alternate system for improving voting processes. The success of such initiatives will, in time, trigger the emergence of decentralized parties. While it may take a few years for decentralized parties to garner the sort of influence associated with political parties, their establishment as a viable alternative to traditional governance systems is inevitable. https://www.entrepreneur.com/article/373474