What is an autonomous decentralized organization?
DAOs are a digital version of any physical organization that monitors governance without centralized leadership, with each member participating in decision-making. A DAO is based on a decentralized, transparent and irreversible computer program run on a blockchain known as a smart contract and becomes the observer who ensures that only eligible entities propose or vote and that upon reaching the minimum vote the proposal becomes a decision (with direct execution if the voted action is in the blockchain).
The differences between a DAO and a traditional organization
DAOs have a striking resemblance to traditional organizations but also critical differences
• Traditional organizations have hierarchies, DAOs do not have such hierarchies. Decisions are made from the bottom up by the community, each member has a say in how the organization is governed. Hence the „Decentralized Organization”
• Traditional organizations cannot function without honest leaders and observers actively involved, DAOs run without intermediaries. Hence the „Autonomous Organization”