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Why Blockchain Could Prevent Another Theranos

Why Blockchain Could Prevent Another Theranos
Written by publisher team

although Bitcoin (CCC:BTC-USDOn all the headlines, one of the most exciting developments in the new digital world is how blockchain has sparked many of the best minds in technology to reimagine how business and finance work.

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The time has come – and is there better evidence than Theranos and its famous leader Elizabeth Holmes?

Holmes was finally convicted of four counts of fraud and conspiracy against investors in her failed blood-testing company. Whatever the outcome of the criminal trial, it was inevitable that Holmes would live in disgrace as “Millennial Madoff”… if Bernie Madoff had created a biotech startup instead of a Ponzi scheme.

Certainly, many entrepreneurs have targeted (or claimed) to change the world. But Holmes took it to another level. To present herself as a rising star in Silicon Valley, she changed her voice and changed her entire daily routine, minute by minute. She even rewrote Theranos’ origin story to include a favorite uncle with cancer. In the absence of a “new revolutionary blood screening technology”, this is in fact a jobHolmes focused on selling the dream — getting a whole new character out of the blue.

In the end, Holmes was giving people what they wanted: the “Insightful CEO” icon who would reshape the world. “Everyone wanted to work with the next Steve Jobs,” her former employees point out, and she comes with them on the trip.

But times have changed. Trust in authority is at an all-time low, including just 17% of Americans saying they have a “significant amount” of trust in big tech companies.

Most importantly, the best and brightest in technology gravitate away from these authoritarian structures.

In the 2000s and 2010s, Holmes could rule Theranos with an iron fist — and without any checks and balances. But in the new digital world, there are some radical new standards being championed that could stop even the most daring startup smoke-and-mirrors founders. This is why.

Blockchain empowers workers to stand up to unethical practices

While Theranos employees were struggling to devise a blood-testing machine that could live up to the hype…Theranos investors had no idea their money was going toward a fundamentally flawed technology.

The claim was that Theranos’ Edison machine was a “lab in a box” that could perform 200 different blood tests with just one finger prick. Theranos never had a machine that could actually work. But to create the illusion that it could, the company simply deceived its early investors. In the HBO . documentary Inventor: Out for Blood in Silicon Valley, a biochemist at Theranos reported how:

The investors would come in for a demonstration in which the employees would “take a fingerprint from the blood, put the blood in the cartridge, put the cartridge in the Edison machine. They would get the executives out of the room to go to a meeting or go to lunch or whatever. And right after that, an engineer would come in, And take out the cartridge, and bring it to the lab, where my team runs tests on the platform… [An hour later,] The engineer was entering the room with these results. And they’d say, “Oh, here’s your results from taking our tests!”

Financial documents were also falsified. At her trial, Elizabeth Holmes was able to place much of the blame on her boyfriend/company head, Sunny Balwani. But Holmes admitted, under oath, to add Pfizer (New York Stock Exchange:PFE) logos for lab validation reports, indicating that Big Pharma had produced them… when in fact Theranos itself had them. These fake reports became part of the investor’s package – and thus, the main evidence of Holmes’ fraud.

Staff were often well-versed in deception, but at every turn, they were undermined, silenced, and discredited.

When Ryan Wistort of Theranos Research and Development raised a basic objection – that “the laws of physics won’t allow us to cram all this in.” [testing equipment] that we built in this little box” — he was told: “Maybe I’m not a Silicon Valley person. Maybe you should go work for another company.”

On the contrary: all the other “Silicon Valley residents” of Theranos had problems, too. But management kept a lid on them by keeping everyone working in silos. “If people from the chemistry team could talk about what’s coming next from the engineering team, they’d say, ‘Well, that won’t solve the problem. “Since everyone was working on it separately, we could go on forever without actually solving anything,” one interview with the HBO documentary described.

In a central structure like Theranos, Holmes or Balwani will fire you simply for failing to support the scheme.

In the new structure of a Decentralized Autonomous Organization (DAO), any stakeholders – including workers – can simply vote against any policies that endanger the mission. In the five years since DAOs first emerged, 1.3 million people have joined, and according to Stanford University, DAOs have acquired more than $500 million in assets. It’s been more than five months since DAOs have truly captured the public’s attention – so this is likely the tip of the iceberg.

Luke Lango, Senior Investment Analyst at Crypto Investor Network, has a great explanation here of the advantages of DAOs and one of the coolest projects going on. Basically, this is what DAOs have to offer:

  1. democracy. Instead of Elizabeth Holmes – or Mark Zuckerberg – power is scattered around an entire community of stakeholders.
  2. Non-corruption. A lot of the rules and processes were set in stone from the start, and programmed directly into the smart contracts that facilitate DAO… so that leaders can’t tamper with them.
  3. consent. When tough decisions or changes have to be made along the way, the group will make them. Voting rights can be divided between workers, users, and anyone who might want to buy tokens in the project.
  4. Transparency. While not everyone may have equal voting rights in a token-based system, all decisions and policies will be recorded on the blockchain for anyone to see, follow and raise objections to.

It is worth noting that these decisions will include employment. in Theranos, An apple (NASDAQ:AAPLThe staff from Cupertino were brought in to design a beautiful exterior housing for an Edison machine. Meanwhile, the inside of the machine was barely there…and yet Holmes diverted resources away from the engineers and biochemists who worked desperately to fix the Theranos’ blood test.

In contrast, in DAOs like Moloch (which raises funds for Ethereum projects), potential newcomers are evaluated by the group. If it’s not a good match, the rest of the DAO can vote against the lease.

Blockchain and DAOs are here to stay and change the game

With all this happening on the blockchain, it is not surprising that many well-known DAOs include cryptocurrency trading:

Uniswap (CCC:UNI-USD) And Sushi Swap (CCC:Dollar sushi), decentralized cryptocurrency exchanges; synthetic (CCC:SNX-USD), where you can create and trade derivatives such as crypto options and “perpetual futures”; Finance (CCC:YFI-USD), which specializes in yield farming; And avi (CCC:AAVE-USD), a crypto money market platform, are all subject to DAOs.

More are sure to follow. Last November, crypto projects reached $3 trillion in market capitalization in nearly 10 years. This is roughly equal to the total value of all the VC-backed startups on Crunchbase’s own Unicorn board.

But DAOs are not Just about the currency. The blockchain is the easiest way to turn an idea into a movement, coordinate with like-minded people from all over the world, and attract funds to do so.

Many DAOs are already associated with art, music, film, and writing. After all, on the Internet, “content is king” – a valuable asset whose creators are finally able to take control and unleash their true value on the blockchain. There are plenty of non-fungible (NFT) DAOs, of course; You can invest in a “digital museum” of NFTs through PleasrDAO or SquiggleDAO. Or you can create, sell and collect NFT on your own rare (CCC:Rary Dollars), which is also governed by DAO.

In publishing, aims to be a kind of “blockchain broker” where you can start a blog, instantly mint it as an NFT, and follow articles from your favorite writers. BanklessDAO publishes articles on crypto investing, newsletters, and podcasts.

Some of the most interesting DAOs are intended to disrupt spotify (New York Stock Exchange:spot) And Netflix (NASDAQ:NFLX)!

audio (CCC:Audio in US dollars) is a decentralized music streaming app where you can stream music, publish your music, and earn audio for it all. Artists like Skrillex, Steve Aoki, deadmau5, Disclosure, comedians like Hannibal Burris, and up-and-coming works are featured in Audius.

Likewise, one of the newer DAOs is looking to stream movies and use subscription fees to fund original content… and buy the Blockbuster Video brand name for their platform! So far, 7,650 members have joined the BlockbusterDAO community on Discord, to discuss how to make this happen. The plan is to raise $5 million to buy Blockbuster from dish network (NASDAQ:Dish), and Michelle Berard – the daughter of one of Blockbuster’s founding CEOs, Stephen Berard – joined in “Bring Blockbuster Back to the People!”

Whatever the mission, all of these DAOs offer the same tremendous incentive to workers as well as investors: a voice in how things are run.

DAOs empower experts in their ranks

Elizabeth Holmes could have taken Theranos off Earth just as quickly with the DAO… but she wouldn’t have been able to make unilateral decisions, or silent opposition in the ranks, because she wouldn’t have had the same amount of power over operations.

The democratic nature is fundamental, because the collective thinking of Theranos’ board of directors – Holmes as well as a few wealthy “good boys” – was a major factor in its fraud. People with technical knowledge of microfluidics (and frankly women) tend not to fall for Holmes’ empty promises.

When the DAO structure takes hold, workers will easily avoid the situation they encountered at Theranos, “where [employees] equate it with a South American dictatorship or a drug cartel” in their Glassdoor reviews, product designer Anna Areola recalls.

As DAO becomes more transparent and equal, the new digital world can put an end to all of that.

And if your DAO turns out to be not a good fit anyway? You can easily transition to other organizations/projects where you feel most valuable and effective.

In the ancient world that empowered Elizabeth Holmes (and countless other bad bosses), none of this was really possible, even for rock’s biggest staff. In the new digital world of blockchain and DAOs, this has really taken off, changing the paradigm completely.

At the date of publication, Ashley Cassel did not (directly or indirectly) hold any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, and are subject to Posting Guidelines.

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