The following concepts are worth citing in the context of decentralization. The terminology introduced here is often used in the literature concerning decentralization and its applications.
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Smart Contracts
A smart contract is a software program that usually runs on a blockchain. Smart contracts do not necessarily need a blockchain to run; however, due to the security benefits that blockchain technology provides, blockchain has become a standard decentralized execution platform for smart contracts.
A smart contract usually contains some business logic and a limited amount of data. The business logic is executed if specific criteria are met.
Actors or participants in the blockchain use these smart contracts, or they run autonomously on behalf of the network participants.
Autonomous Agents
An Autonomous Agent (AA) is an artificially intelligent software entity that acts on the behalf of its owner to achieve some desirable goals without requiring any or minimal intervention from its owner.
Decentralized Organizations
Decentralized Organizations (DOs) are software programs that run on a blockchain and are based on the idea of actual organizations with people and protocols.
Once a DO is added to the blockchain in the form of a smart contract or a set of smart contracts, it becomes decentralized and parties interact with each other based on the code defined within the DO software.
Decentralized Autonomous Organizations
Just like DOs, a decentralized autonomous organization (DAO) is also a computer program that runs on top of a blockchain, and embedded within it are governance and business logic rules.
DAOs and DOs are fundamentally the same thing. The main difference, however, is that DAOs are autonomous, which means that they are fully automated and contain artificially intelligent logic. DOs, on the other hand, lack this feature and rely on human input to execute business logic.
Currently, DAOs do not have any legal status, even though they may contain some intelligent code that enforces certain protocols and conditions. However, these rules have no value in the real-world legal system at present.
Decentralized Autonomous Corporations
Decentralized autonomous corporations (DACs) are similar to DAOs in concept, though considered to be a subset of them.
The definitions of DACs and DAOs may sometimes overlap, but the general distinction is that DAOs are usually considered to be nonprofit, whereas DACs can earn a profit via shares offered to the participants and to whom they can pay dividends.
DACs can run a business automatically without human intervention based on the logic programmed into them.
Decentralized Autonomous Societies
Decentralized autonomous societies (DASes) are a concept whereby an entire society can function on a blockchain with the help of multiple, complex smart contracts and a combination of DAOs and decentralized applications (DApps) running autonomously.
Many services that a government commonly offers can be delivered via blockchains, such as government identity card systems, passports, and records of deeds, marriages, and births.
Decentralized Applications
All the ideas mentioned up to this point come under the broader umbrella of decentralized applications, abbreviated to DApps. DAOs, DACs, and DOs are DApps that run on top of a blockchain in a peer-to-peer network. They represent the latest advancement in decentralization technology.
Suryateja Pericherla, at present is a Research Scholar (full-time Ph.D.) in the Dept. of Computer Science & Systems Engineering at Andhra University, Visakhapatnam. Previously worked as an Associate Professor in the Dept. of CSE at Vishnu Institute of Technology, India.
He has 11+ years of teaching experience and is an individual researcher whose research interests are Cloud Computing, Internet of Things, Computer Security, Network Security and Blockchain.
He is a member of professional societies like IEEE, ACM, CSI and ISCA. He published several research papers which are indexed by SCIE, WoS, Scopus, Springer and others.
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