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Bitcoin, a DAO?

Mark C. Ballandies, Guangyao Li, Claudio J. Tessone

TL;DR

The paper investigates whether Bitcoin qualifies as a decentralized autonomous organization (DAO) and what its governance implies for the broader DAO ecosystem. It introduces a DAO viability framework based on collective intelligence, digital democracy, and adaptation, and applies it to Bitcoin to assess its open participation, deliberation via BIPs, miner signaling, and noncentralized adaptation. Findings show Bitcoin exhibits DAO-like characteristics alongside governance risks such as concentration of economic power and the absence of a formal legal entity. The work highlights design implications for improving deliberation and emphasizes Bitcoin as an archetype that expands the DAO design space beyond legally bound entities, with practical relevance for future DAO implementations.

Abstract

This paper investigates whether Bitcoin can be regarded as a decentralized autonomous organization (DAO), what insights it may offer for the broader DAO ecosystem, and how Bitcoin governance can be improved. First, a quantitative literature analysis reveals that Bitcoin is increasingly overlooked in DAO research, even though early works often classified it as a DAO. Next, the paper applies a DAO viability framework - centering on collective intelligence, digital democracy, and adaptation - to examine Bitcoin's organizational and governance mechanisms. Findings suggest that Bitcoin instantitates key DAO principles by enabling open participation, and employing decentralized decision-making through Bitcoin Improvement Proposals (BIPs), miner signaling, and user-activated soft forks. However, this governance carries potential risks, including reduced clarity on who truly 'votes' due to the concentration of economic power among large stakeholders. The paper concludes by highlighting opportunities to refine Bitcoin's deliberation process and reflecting on broader implications for DAO design, such as the absence of a legal entity. In doing so, it underscores Bitcoin's continued relevance as an archetype for decentralized governance, offering important findings for future DAO implementations.

Bitcoin, a DAO?

TL;DR

The paper investigates whether Bitcoin qualifies as a decentralized autonomous organization (DAO) and what its governance implies for the broader DAO ecosystem. It introduces a DAO viability framework based on collective intelligence, digital democracy, and adaptation, and applies it to Bitcoin to assess its open participation, deliberation via BIPs, miner signaling, and noncentralized adaptation. Findings show Bitcoin exhibits DAO-like characteristics alongside governance risks such as concentration of economic power and the absence of a formal legal entity. The work highlights design implications for improving deliberation and emphasizes Bitcoin as an archetype that expands the DAO design space beyond legally bound entities, with practical relevance for future DAO implementations.

Abstract

This paper investigates whether Bitcoin can be regarded as a decentralized autonomous organization (DAO), what insights it may offer for the broader DAO ecosystem, and how Bitcoin governance can be improved. First, a quantitative literature analysis reveals that Bitcoin is increasingly overlooked in DAO research, even though early works often classified it as a DAO. Next, the paper applies a DAO viability framework - centering on collective intelligence, digital democracy, and adaptation - to examine Bitcoin's organizational and governance mechanisms. Findings suggest that Bitcoin instantitates key DAO principles by enabling open participation, and employing decentralized decision-making through Bitcoin Improvement Proposals (BIPs), miner signaling, and user-activated soft forks. However, this governance carries potential risks, including reduced clarity on who truly 'votes' due to the concentration of economic power among large stakeholders. The paper concludes by highlighting opportunities to refine Bitcoin's deliberation process and reflecting on broader implications for DAO design, such as the absence of a legal entity. In doing so, it underscores Bitcoin's continued relevance as an archetype for decentralized governance, offering important findings for future DAO implementations.
Paper Structure (22 sections, 2 figures, 3 tables)

This paper contains 22 sections, 2 figures, 3 tables.

Table of Contents

  1. Introduction
  2. Background
  3. Bitcoin, a DAO? A quantitative analysis
  4. Summary:
  5. DAO viability framework
  6. Summary
  7. Bitcoin's decentralized organization
  8. Collective Intelligence
  9. Openness
  10. Transparency
  11. Privacy
  12. Freedom of expression
  13. Digital Democracy: Decision-making
  14. Deliberation:
  15. Voting:
  16. ...and 7 more sections

Figures (2)

  • Figure 1: Total numbers of DAO papers published (bar chart), the proportion of Bitcoin being mentioned in those papers (solid line), and the proportion of papers mentioning bitcoin in different parts of the paper (dashed lines).
  • Figure 2: Left: Proportion of academic papers discussing Bitcoin, and within that subset, the proportion considering Bitcoin as a DAO. Right: Average sentiment toward the statement "Bitcoin has great potential" across papers discussing Bitcoin, comparing those that explicitly consider Bitcoin as a DAO (Bitcoin == DAO) and those that do not (Bitcoin == False).