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Comment by joshlemer | Hacker News Reader

Tangential crypto question: I wonder why there hasn't been a rise of gray/black market corporations, with their stock sold on a blockchain, with shareholder votes implemented on blockchain, allowing for international, anonymous crowd-directed public corporations? I mean, at the very least why wouldn't the black market have started to move in this direction?

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How do the shareholders control the operation without recourse to the legal system?

Probably a mechanism where the shareholders could vote to fire/replace the CEO (and therefor lock them out of issuing more shares, or spending money on behalf of the corporation) at regular intervals.

Hmm, would that be enough?

Consider a darknet marketplace. We start some kind of DAO/smart contract, where people put in crypto to get shares, which are used to fund the creation of the marketplace. Let's assume it get's built, the DAO could transfer funds incrementally with votes on the progress or something.

The profit generated from the ads are then deposited back in to the DAO, with a portion going to the voted CEO and the rest to the shareholders.

But what hinders the "management" of the marketplace, who controls the servers, to just stop transferring funds back in? The CEO could be replaced in the contract, but as long as you control the servers, that doesn't matter, right?

Well, I guess if it were to be more like a real world corporation, the shareholders would elect a board, which selects a CEO. If the board goes rogue with the some of the private AWS keys, or other company assets, past the point where the shareholders vote to replace them, then I would imagine the shareholders would want to elect board members who would take action to re-secure the physical assets, possibly via extralegal means. For some assets, one could also imagine a smart contract that automatically expires control of the asset as soon as the CEO/board is changed. By the way, not that I am endorsing this as good for society, though it's interesting, and I could just see this being a beneficial innovation for black/gray market firms.

I remember few companies already doing this. The shapeshift DAO. They migrated from a traditional corporation to one incorporated and governed by a Defi contract

Well, the biggest roadblock to that would be securities laws and their enforcement agencies. I doubt the SEC and its analogues in other nations would just sit and watch that happen.

Maybe a black-market "corporation" like a drug-smuggling ring could try something like that, but even they would have reservations.

Yeah most definitely it would be illegal, but the power of crypto is that illegal things become legal, or at least uncontrollable. Issuing your own currency was/is illegal, but Bitcoin's decentralized and impersonal nature made it impossible to shut down.

There were cases that some of the earliest companies created around Bitcoin sold ownership for bitcoin only.

Why does it have to be a drug-smuggling ring? Why cant it be a group of elitist wealthy do-gooders (elected and unelected), who don't want to invite the middle class in, and be subjected to the rules of Wall Street?

If someone has a massive black market operation, why would they give up any control at all?

The same reason that owners in the formal economy give up control of their corporations to go public -- to raise capital, make their equity liquid, publicity, etc.

this is what DAOs are. There are a bunch of them, but so far they haven't accomplished the things they set out to do and have generally been at best a disorganized mess that accomplishes nothing and at worst a straight rug pull.

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