Why Decentralized Conglomerates Will Scale Better than Bitcoin - Interview with OpenLedger CEO
Bitcoin.com spoke with the OpenLedger CEO, Ronny Boesing to get deeper insight of how decentralized conglomerates will challenge the status quo, why they will bring greater financial freedom to the public, and the disadvantages of Bitcoin when it comes to enterprise scaling compared to DC’s.
Also read: Deloitte: Blockchain Will ‘Gain Significant Traction’ by 2020
The Coming Age of ‘Decentralized Conglomerates’
As the OpenLedger team recently announced its Global Enterprise 3.0 program, its universal shared application called “Decentralized Conglomerate” (DC) is poised to revolutionize how we look at big business in the 21st century.
For a long time, the traditional conglomerate model went unchallenged (e.g. Berkshire Hathaway, Philip Morris etc.) until the emergence of the Internet and increasing global interconnectivity. A new digital conglomerate structure began to emerge with the likes of Google (and its Alphabet Inc. parent company), which became more efficient at managing the production and distribution of their products. Nevertheless, the formal top-down structure of these new digital age conglomerates remained, including the the traditional way of how profits are distributed – that is, until now.
“Decentralized Conglomerates are the next logical step.”
– Ronny Boesing
Bitcoin.com (BC): Conglomerates first existed in physical form such as Berkshire Hathaway, after which we saw the advent of digital ones such as Google and Alphabet. Are decentralized autonomous conglomerates the next logical step in this evolution?
Ronny Boesing (RB): Without question, Decentralized Conglomerates are the next logical step. It should be noted that there will be Autonomous and Semi-Autonomous organizations that emerge. The difference being the level of organizational influence exerted over the universal platform.
In an Autonomous Conglomerate, the contracts and workers would be completely independent of having any external influence or association with another entity, but may simply be using the same platform as another organization. In a Semi-Autonomous Conglomerate, there will be some level of external influence, support, or association with an official business. This means that an organization has special interest in the associated operations of the Conglomerate, and some semblance of top-down influence may occur.
BC: What are the basic advantages of decentralized conglomerate over a centralized one like Google, for example?
RB: A Decentralized Conglomerate allows organizations to join the forces of their communities on a universal platform that allows cross promotion and profit sharing, but does not force it. This paradigm also allows individual brand identities to flourish within the Conglomerate without having to worry about the interests of the Universal Platform conflicting with the interests of any given brand using the platform. In a traditional or even a digital conglomerate, the mission of the parent company guides the decisions of the subsidiaries.
BC: Is anyone free to join such an online conglomerate community?
RB: The system is agnostic, so that anyone who wants to create an asset for their organization or commodity has the capacity to do so.
All tokens do not have equal risk, and some are far less risky than others to purchase.
BC: Some could argue that MLM pyramid structured companies are also “profit sharing” communities, though this entails a lot of risk as we all know. What kind of risk is there for people choosing to enter and buy the digital tokens of a decentralized conglomerate or its constituents?
RB: The risk of purchasing such tokens depends on many things, such as the market capitalization of the DC, the number of organizations connected to the DC, the capacity to exchange tokens for other forms of currency or products, the size of the reserve backing a given token. All tokens do not have equal risk, and some are far less risky than others to purchase. Everyone should do their due diligence to know how solid the infrastructure is behind any given token or DC.
BC: Can’t Bitcoin be considered the world’s first decentralized conglomerate?
RB: Bitcoin is not a conglomerate. It is a decentralized ledger. The only purpose of Bitcoin’s blockchain was to keep track of transactions. Many organizations expanded upon the original protocol to create colored coins and languages that permitted applications to be built on top of the Bitcoin blockchain. However, this was not the original intention of “Bitcoin” proper, and specifically talking about “Bitcoin,” it is apolitical, without special interest, and has no official organizational associations.
[A decentralized conglomerate] was not the original intention of ‘Bitcoin’ proper, […] it is apolitical, without special interest, and has no official organizational associations.
Bitcoin is the world’s first globally accepted currency that has no organizational associations, and that is simultaneously the best and worst aspect about it. Since there is no organization association, the problems that Bitcoin encounters rely on the community to come together and make a unilateral decision. As we have seen with the blocksize scaling issue, the transaction time debate, the recent DDoS attack, and the blockchain halt due to transaction costs; Bitcoin has some real problems that need to be addressed in order for it to be usable for enterprise scale organizations or countries alike.
In that regard, since Bitcoin is apolitical, it doesn’t really make logical sense for any country to switch to something which they have no control over as their main currency. So in that regard, Bitcoin is not only not a conglomerate, the apolitical aspect serves to keep organizations away from holding the currency during the fluctuations, as there is no real organization that has vested interest in keeping Bitcoin stable.
BC: What exactly is OpenLedger’s “Bitcoin 3.0” technology and what are Bitcoin’s disadvantages compared to it when using it within the DC context?
RB: As mentioned, Bitcoin has no associations. This means that the token can be purchased and amassed by any organization or country around the globe, leaving the token subject to wild swings due to margin trading. You see examples with organizations like Ether, Factom, or OpenLedger that have created a token that has organizational backing, and their respective tokens steadily increased in value instead of having wild unpredictable swings. Having an organization that has special interest in the Universal Ledger establishes a community and ecosystem which Bitcoin is lacking. It is the same type of culture that Apple has created using “I” branding that can be achieved with organizational associations. Bitcoin does not have this capacity.
Having an organization that has special interest in the Universal Ledger establishes a community and ecosystem which Bitcoin is lacking.
In order to get mass adoption or successful utilization, it is crucial to have a unified approach to the interface, and this becomes another major failing point of Bitcoin. Openledger has streamlined the UX/UI of digital currency transactions, and this represents a much more user-friendly approach with a smaller learning curve. Having development teams that can do research and development and then modify the UX based on user feedback is a great benefit that DC’s have over Bitcoin.
BC: Can you talk a little bit about the first partnerships between communities on this platform, namely OBITS and BitTeaser?
RB: Every month, 70% of BitTeaser’s monthly Bitcoin profits will be used to buyback BTSR and OBITS on the respective markets on OpenLedger. OBITS does it on the BTC (10%) and BTS (90%) market, and with BTSR it is done on BTS, BTC, USD and ETH markets 25% each. BTSR holders will receive 80% of this share, while OBITS holders will receive 20%.
In the long term, BTSR holders may see an increase in the value per unit of their investment based on supply and demand, as well as having the tokens burned from every buyback thus reducing overall available supply. BitTeaser operates in a similar way to Google Adwords – revenue is generated based on providing advertising space for websites, companies and products. It currently serves over 1,000 webmasters, with monthly growth of around 15 to 20%.
BC: Do they use smart-contracts to establish the terms? How is consensus achieved?
RB: Yes, the system uses smart contracts to establish terms of service and reward. The consensus is achieved by third party confirmation that both sides have accomplished their respective tasks, whether it is putting money in escrow, or completing a contract request.
BC: What was the approximate payout to the writers and bloggers using the platform? Will this amount increase as the overall platform grows?
RB: At the last payment, some 11 BTC worth (currently around $4,500 USD) of BTSR and OBITS was sent to participating bloggers. That amount will increase as the network size and reach of the DC increases.
OpenLedger has made it available for users to directly change tokens to USD, EUR, and CNY and have them directly deposited into their bank account.
BC: How does the DC model interact with traditional fiat currency? Do users have to use an exchange to cash out their rewards?
RB: “In the same way that foreign currencies or bitcoin need to be exchanged before being used, any DC token will need to be changed to be used outside of the infrastructure. If an organization within the DC offers products or services that are desired, a direct purchase using a token could then be made without any exchange. Now, OpenLedger has made it available for users to directly change tokens to USD, EUR, and CNY and have them directly deposited into their bank account.
No longer will a user have to have the hassle of going through an additional step of going to a bitcoin exchange to convert their smart money into fiat. Once a user has been validated he/she is prompted to attempt a withdrawal. Once the withdrawal request is made on OpenLedger for whatever currency is asked, the money is then sent to the user’s bank account with a 3% withdrawal fee. Users can enjoy a fee-free deposit period that ends in August.
[Note: Special thanks to Larry C. Bates, out of Bloomington, Indiana, the architect behind the great description of the DC, a good partner of OpenLedger and his assistance in giving answer to the questions.]
Do you think decentralized conglomerates will change big business around the globe? Let us know your thoughts in the comments below!
Images courtesy of OpenLedger, bitcoinwiki.co