What are Bitpacs? Bitcoin's Version of DAOs
Bitpacs, short for Bitcoin Publicly Auditable Cooperatives, should allow groups to emulate decentralized autonomous organizations (DAOs) on the Bitcoin blockchain.
While DAOs have traditionally been associated with Ethereum, Bitpacs make it possible to achieve similar functionality using Bitcoin's inherent capabilities.
Bitpacs are essentially multisignature Bitcoin wallets with added transparency features. Unlike traditional multisig setups where participants are private, Bitpac members are publicly disclosed. This enables public auditability and transparency for the cooperative's actions and decisions.
Who is the author of Bitpacs? The idea was first conceptualized by an anonymous freelance Bitcoin developer Super Testnet.
The first public mention of Bitpacs appears to be in GitHub.
Video demonstration:
The combination of multisig wallets and carefully structured Bitcoin transactions allows Bitpacs to mimic DAO capabilities. Multisig ensures shared control of funds. Transaction signing thresholds mandate approval percentages for spending. Time constraints can be placed on voting rounds. Platforms can gate membership based on criteria like assets held or Bitcoin contributed, which is verifiable on-chain.
Bitpacs enable new possibilities for the Bitcoin community. They allow for community-driven funding of public goods and projects with transparency. Decentralized governance empowers groups to make collective spending and allocation decisions. This builds trust and fosters collaboration between members united by shared interests.
Some examples of potential Bitpac use cases include funding open source developers, managing organizational treasuries, and crowdfunding campaigns. The transparency of actions and decision-making processes offered by Bitpacs makes them well-suited for these applications.
A key benefit of Bitpacs versus DAOs on other chains is that all transactions settle on Bitcoin's base layer. There are no additional trusted layers or side chains. This makes Bitpacs a robust solution as Bitcoin network activity continues growing over time.
Bitpacs demonstrate Bitcoin's ability to enable decentralized governance and cooperation, without changes to Bitcoin's protocol. As more niche communities form around Bitcoin, Bitpacs can offer them the tools for organization, treasury management, and on-chain governance tailored to their needs.
Dillon Healy is currently building a tooling suite for creating and managing Bitpacs - Tribe. The details are still scarce, but people can sign up on their website to get early access to Beta. While writing this article, I signed up for the beta, and the DAO Times team will be happy to be among the first to give Bitpacs a try. We are also ready to use our resources to spread awareness about the project.
