A Clash between the Old and the New Forms of Organization：Elastos VS Microsoft

Since the birth of Bitcoin in 2009, the Bitcoin community has developed from only a few geeks at the very beginning to 10s of thousands of global users today through community-based operation globally, and it’s still growing. Its RMB value has also increased from almost 0 yuan to 120000 yuan today.

The block chain technology and the open-sourced, community-based organizational form are both huge challenges to the traditional world. Through the community-based project operation, the users can be recognized and utilized by more people through the project token and in turn profit from that, which motivates every user from the community to fuel the development of the project. The problem of customer acquisition and the high acquisition cost is solved through community-based operation, attracting more people with innovative minds to join what would possibly be a revolutionary wave.

Currently, Elastos, representing the open-sourced, community-based projects, is in the form of a community. Whereas Microsoft, representing the traditional Internet projects, has the form of an enterprise. As the representative of two forms of organization, Elastos and Microsoft will engage in a head-on combat in the foreseeable future. Elastos was chosen to represent community-based projects because it’s the oldest, as well as the latest block chain project. It’s the oldest project because its predecessor has been under development since 2000 with an investment of 200 million yuan from Foxconn. After 17 years of development, it now has 10s of millions lines of codes with 4 million original codes. It’s the latest project because after numerous brainstorms and exchange of ideas, they found that the block chain technology, which has brought Elastos’ window phase, is almost tailor-made for this 17-year-old project. Hence the project was transformed into an open-sourced, community-based project, making it a “new project” in the eyes of those from the digital currency and the block chain field. In addition, as a block-chain-driven operation system, Elastos can be compared with Microsoft, the tycoon of operation systems, in different ways. And both of them are the most basic infrastructures of the Internet. However, although platforms such as Bitcoin and Ethereum have a large amount of community users, they cannot be compared with the existing traditional projects. For the above-mentioned reasons, this article has chosen Elastos and Microsoft for comparison in terms of organizational form without carrying out any technological analysis.

Project Participants

Elastos: global community users (token holders + community contributors)
Microsoft: the entire staff

Although at the early stage, there are only a handful or dozens of people from the core team working on the project, but more hands are needed if one wishes to make the project more influential. In the old days, setting up an enterprise is the only way to develop a project, and even some of them succeed, generally speaking the number is still scarce. Plus, without proper management, an enterprise could easily be overstaffed and inefficient, and have many employees who dislike their jobs, which is also a problem. However, with the community-based development of Bitcoin， people were surprised that this is not only a revolution in the financial and science field, but also an innovation in the organizational form, hence we have ETH’s global ecology, NEO’s smart economy, and the buzz of ICO later on. But unfortunately, they have seen the glamour of the community-based development but failed to see its soul while still keeping an enterprise-based mindset，or even resort to some cheap-and-nasty profit-driven behavior，which is saddening. However, the state’s regulatory policy came in time for a good cleanout. While after introspection, the wise begins to realize that in a real community culture, investment is only a small part, whereas participating in its building is what it is all about. In community-based projects, people could contribute to two or more projects that they support based on their preference and strength. As long as the project is good enough, the amount of users will grow exponentially over time even if it only relies on spreading it by word of mouth. What’s more interesting is that these users are both consumers and investors for the same.

Overview of the Form of Organization

Enterprise: there are many different forms of organization for enterprises, but one thing that they have in common is that the management structure of an enterprise is hierarchical. Like a pyramid, the higher you go, the less people there will be, and the more power you’ll have, which is why it’s called a “pyramid” organization form or a hierarchical organization form.

Community: the organizational form of a community is initially set up by the founding team, then developed globally with global participation. The community users could participate in the construction of the project equally on technology, market and other aspects based on their strength and interests. All users codetermine the community’s major affairs which are usually voted upon based on the amount of tokens they hold for the community’s projects. The community might have groups or even enterprises within it, but they can only be a point of accumulative power initiated by the users, which is equal to individual users within the community to ensure equal rights for everyone. So the organization form of a community allows universal participation and equal rights.

Profit Model

Elastos： appreciation of tokens with the development of the ecology
Microsoft Windows: sales of software and services.

As for MS Windows, large enterprises would sign corporate treaties with Microsoft to get all MS products as a package by paying Microsoft a handsome license fee to ensure performance and stability. Medium-sized and small enterprises need a large number of Microsoft’s authorized applications, so they have to pay for them as well. Individual users also pay for other Microsoft products. However, Elastos is different. In the Elastos system, the users can use the system for free, but they have to pay for service charge, basic services, digital contents and cash future wealth in the system using ELA tokens. What if you don’t have ELA tokens? Well, you buy them! So Microsoft, a traditional project, makes profit by selling products and services, while Elastos, a community-based project, does that by embedding the basic token——ELA token which would be used to pay for the service charge for warrant transaction, building Dapp applications, buying digital contents, etc. in the operation system. ELA token, whose price is determined by the market, can be bought in the second-tier market. With the development of the project and the increasing demand and liquidity of ELA token, the price will go up, which in turn will increase the profit of the community users. The token is so precious, so what if no one wants to sell it? Well, that concern is totally unnecessary. No business can’t be done with the right price. I consider token as something better than the stock of an enterprise. Having tokens means having a part of the project. Regardless of what the founding team does, the global community can promote the development of the project. As long as the project operates stably, the token will have value. Whereas holding stocks entirely relies on the company. If the company has a problem, then it’s basically game over. So I believe makiing the project community-based and token-based does not mean we don’t serve the tangible economy. Because if we consider projects such as Elastos as not serving the tangible economy, then the enormous Microsoft empire would lose the meaning of its existence.

There will be more community-based projects in the next five years, while the battle of operation systems between Elastos and Microsoft in the near future will fire the first shot of the conflict between these two organizational forms, which would be revolutionary.