A decentralized autonomous cooperative (DAC) is a virtual organization held by shareholders rather than a central authority.
Understanding of the term
Also known as a decentralized autonomous organization (DAO), a DAC has a business plan, protocol, and agenda. With no central point of control, it functions by coding rules into a reliable computer program accessible by each member of the organization.
A DAC incorporates self-regulation and aims to act independently without its creators, once it is fully operational. The goal of DACs is to have a network of autonomous agents to accomplish objectives independently, where a blockchain is used to maintain all records of financial transactions and program rules.
Due to their distributed nature, DACs do not have a single point of failure, and they cannot be modified or shut down in order to conduct illegal activities. As a result, they offer accessible forms of decentralization and transparency, allowing for greater scaling than traditional organizations.
In light of the relatively new concept of cryptocurrency and increasing regulations, DACs have greater flexibility in designing organizations than traditional legal entities as long as they comply with state laws. The rules are encoded in a transparent computer program controlled by the organization’s members and not influenced by central authorities. ?