Ethereum's Co-founder, Buterin, Draws Comparisons Between the Origins of Visa and Decentralized Autonomous Organizations (DAOs)
In the early days, Visa, the global payments giant, was envisioned as a unique entity – a chaordic organization – by its founder, Dee Hock. This term, coined by Hock, describes organisations that operate between chaos and order, where no single part controls the whole and cooperation blends with competition to create efficient, adaptive, and evolutionary communities.
Hock's vision for Visa was one of equitable, decentralised governance, characterised by distributed power, diversity, and non-hierarchical membership. In essence, he aimed to create a non-stock membership organisation without traditional shareholder pressure.
These ideals closely resonate with the principles behind cryptocurrencies and Decentralised Autonomous Organisations (DAOs). Both systems aim to govern without central authority, equitably distribute power within communities, and employ distributed decision-making and governance without central control.
However, Visa's journey deviated from this path after its initial public offering (IPO) in 2007. The company transformed into a centralised, profit-maximising entity, with governance dominated by shareholders and high transaction fees. This shift, often criticised by the crypto community, has led figures like Ethereum's Vitalik Buterin to perceive modern Visa as "extractive" and "oppressive" in contrast to the decentralised ethos of cryptocurrencies and DAOs.
Despite this departure, Visa has begun to engage with cryptocurrencies and Web3 technologies. In 2021, they started piloting Circle's USDC stablecoin for settlements powered by Ethereum, marking a step towards re-embracing decentralised concepts. They have also launched stablecoin-linked cards and integrated Web3 infrastructure that enables seamless crypto-to-fiat withdrawals.
This partial re-engagement with decentralised concepts balances central control with decentralised innovation. As Visa moves to embrace cryptocurrencies instead of fighting the burgeoning sector, it's clear that there are still good insights to learn from Hock's original ideas.
In summary, Dee Hock's vision for Visa as a chaordic, decentralised organisation strongly parallels the foundational ideas of cryptocurrencies and DAOs. While Visa's evolution into a centralised corporation contrasts sharply with this vision, the underlying concepts continue to influence the crypto and DAO movements.
- Decentralized governance, aforementioned in Hock's vision for Visa, has similarities with the principles of DAOs, as both aim for equitable distribution of power and decentralized decision-making.
- Modern Visa's centralized structure, characterized by shareholder dominance and high transaction fees, is a departure from Hock's original chaordic organization, often criticized by the crypto community as "extractive" and "oppressive."
- However, Visa's recent engagement with cryptocurrencies and Web3 technologies, such as piloting Circle's USDC stablecoin for settlements on Ethereum, represents an attempt to re-embrace decentralized concepts, signifying a balance between central control and decentralized innovation.
- As Visa navigates the cryptocurrency landscape, there remains valuable insight to be gained from Hock's original ideas about chaordic, decentralized organizations, particularly in light of the close parallel between his vision for Visa and the foundational concepts of cryptocurrencies and DAOs.
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