What is a DAO?
von Satoshi Nakamoto
Imagine this: a driverless car cruises around in search of passengers.
After dropping someone off, the car uses its profits for a trip to a charging station. Except for it's initial programming, the car doesn't need outside help to determine how to carry out its mission.
That's one "thought experiment" brought to you by former bitcoin contributor Mike Hearn in which he describes how bitcoin could help power leaderless organizations 30-or-so years into the future.
What Hearn described is one dream use case for a decentralized autonomous organization, or a DAO, an idea that swirled through the community not long after bitcoin was released in 2009. The thought is that if bitcoin can do away with financial middlemen, then maybe companies and other organizations can one day operate without hierarchical management.
In short, DAOs aim to hard-code certain rules that a company would from the get-go. This could be setting aside a certain percentage of earnings for a cause or determining a process by which such a rule could be changed.
In the abstract, this is similar to how a normal company works. The big difference is that the rules of normal companies are not enforced digitally.
The DAO
The best-known attempt at creating such an organization was called "The DAO."
Launched in 2016, the project failed in a matter of months, but it's a good example of what people have in mind when they talk about the technology.
The plan was for participants to receive DAO tokens, then vote for which projects to fund. For selecting projects to invest in, it relied on the "wisdom of crowds."
There are a few ways that The DAO intended to improve on the governance of today's organizations:
Anyone with internet access could hold DAO tokens or buy them
DAO creators could set whatever rules they voted on.
In abstract, DAOs function similarly. They rely on smart contracts, or pre-programmed rules that describe what can happen in the system.
These smart contracts can be programmed to carry out a variety of tasks, such as doling out funds after a certain date or when a certain percentage of voters agree to fund a project.
Some proponents say it can work for an organization where any sort of decision needs to be made, not just those related to money.
Essentially, they see it as a way to cryptographically guarantee democracy, where stakeholders can vote on adding new rules, changing the rules, or ousting a member, to name a few examples.
Security
It's easy to see why "unstoppable code" could pose a security problem.
Today, it's difficult to change a DAO, or the smart contracts underpinning it once it's deployed to the ethereum blockchain. This is "good," because one person or entity can't change the rules.
But it's also potentially a huge disadvantage. If someone spots a bug in a running DAO, developers can't necessarily change the code.
That was the problem with The DAO. Observers watched the attacker slowly drain of funds, but they couldn't do anything to stop it. (Technically, the hacker was following the rules as they were deployed).
Ethereum's lead coders reversed the transaction history to return funds to their owners, which was a controversial decision leading to a rift in the community.
The best way to handle a similar future situation is still up to debate.
Authored by Alyssa Hertig; images by Maria Kuznetsov; Coindesk
NEXT: HOW DO ETHEREUM SMART CONTRACTS WORK?
INDEX: A BEGINNERS GUIDE TO BITCOIN AND BLOCKCHAIN TECHNOLOGY
What is Bitcoin?
It’s a decentralized digital currency
Why Use Bitcoin?
It’s fast, cheap to use, and secure
How Can I Buy Bitcoin?
From an exchange or an individual
How to Buy Bitcoin in the UK
Buying bitcoin in the UK
How to Store Your Bitcoin
Use a digital or paper wallet
What Can You Buy with Bitcoin?
Spend your bitcoins
How to Sell Bitcoin
A guide on how to sell your bitcoins
How to Accept Bitcoin Payments for Your Store
Learn about bitcoin POS systems
How do Bitcoin Transactions Work?
Bitcoin addresses and private keys
Is Bitcoin Legal?
The current regulation around bitcoin
Who is Satoshi Nakamoto?
The founder of bitcoin
How Bitcoin Mining Works
By confirming transactions
How to Set Up a Bitcoin Miner
Generate bitcoins yourself
What are Bitcoin Mining Pools?
What are pools how and how to join them?
How Does Cloud Mining Bitcoin Work?
Alternative bitcoin mining solutions
How to Calculate Mining Profitability
Can you make a ROI?
How to Make a Paper Bitcoin Wallet
Creating an unhackable bitcoin wallet
Can Bitcoin Scale?
A look at the debate and the tech
What is SegWit?
A new way of storing transaction data
What is the Lightning Network?
Off-chain transaction channels
What is Bitcoin Cash?
Same blockchain, different characteristics.
Hard Fork vs Soft Fork
Why and how do blockchains split?
What is the Difference Between Litecoin and Bitcoin?
It’s the silver to bitcoin’s gold
How to Buy Litecoin
How to buy the bitcoin alternative litecoin
How to Mine Litecoin and other Altcoins
How to generate your own altcoins
Understanding Bitcoin Price Charts
A primer on bitcoin price charts
Bitcoin E-Commerce Services for Merchants
How to accept bitcoin at your business
What is Blockchain Technology?
A system of distributed data and logic
How Does Blockchain Technology Work?
Cryptographic keys, distributed networks and network servicing protocols
What Can a Blockchain Do?
Identity, recordkeeping, smart contracts and more
What is a Distributed Ledger?
A dynamic, independently maintained database
What is the Difference Between Public and Permissioned Blockchains?
Can anyone read or write to the ledger?
What is the Difference Between a Blockchain and a Database?
It begins with architectural and administrative decisions
What Are the Applications and Use Cases of Blockchains?
Tokenization, auditing, governance, settlement and more
How Could Blockchain Technology Change Finance?
Cross-border payments, new asset classes, regulatory compliance and more
What are Blockchain’s Issues and Limitations?
Complexity, size, costs, speed, security, politics and more
Why Use a Blockchain?
To manage and secure digital relationships as part of a system of record
What is Ethereum?
A blockchain application platform and ‘world computer’
What is Ether?
The ‘fuel’ of the ethereum network
How to Use Ethereum
Wallets, trading and ‘dapps’
Who Created Ethereum?
Vitalik Buterin
How Ethereum Mining Works
‘Proof of Work’ and ‘Proof of Stake’
How to Mine Ethereum
GPUs, mining software and pools
How Ethereum Works
‘Turing-complete’ programming, ‘state’ and the ‘EVM’
What is a Decentralized Application?
A distributed ‘smart contract’ system
What is a DAO?A ‘decentralized autonomous organization’
How Do Ethereum Smart Contracts Work?Code, transaction fees and ‘gas’
How Will Ethereum Scale?‘Sharding’ and ‘off-chain’ transactions
What is an ICO?Initial Coin Offerings refer to the distribution of digital tokens
Read the full article
After dropping someone off, the car uses its profits for a trip to a charging station. Except for it's initial programming, the car doesn't need outside help to determine how to carry out its mission.
That's one "thought experiment" brought to you by former bitcoin contributor Mike Hearn in which he describes how bitcoin could help power leaderless organizations 30-or-so years into the future.
What Hearn described is one dream use case for a decentralized autonomous organization, or a DAO, an idea that swirled through the community not long after bitcoin was released in 2009. The thought is that if bitcoin can do away with financial middlemen, then maybe companies and other organizations can one day operate without hierarchical management.
In short, DAOs aim to hard-code certain rules that a company would from the get-go. This could be setting aside a certain percentage of earnings for a cause or determining a process by which such a rule could be changed.
In the abstract, this is similar to how a normal company works. The big difference is that the rules of normal companies are not enforced digitally.
The DAO
The best-known attempt at creating such an organization was called "The DAO."
Launched in 2016, the project failed in a matter of months, but it's a good example of what people have in mind when they talk about the technology.
The plan was for participants to receive DAO tokens, then vote for which projects to fund. For selecting projects to invest in, it relied on the "wisdom of crowds."
There are a few ways that The DAO intended to improve on the governance of today's organizations:
Anyone with internet access could hold DAO tokens or buy them
DAO creators could set whatever rules they voted on.
In abstract, DAOs function similarly. They rely on smart contracts, or pre-programmed rules that describe what can happen in the system.
These smart contracts can be programmed to carry out a variety of tasks, such as doling out funds after a certain date or when a certain percentage of voters agree to fund a project.
Some proponents say it can work for an organization where any sort of decision needs to be made, not just those related to money.
Essentially, they see it as a way to cryptographically guarantee democracy, where stakeholders can vote on adding new rules, changing the rules, or ousting a member, to name a few examples.
Security
It's easy to see why "unstoppable code" could pose a security problem.
Today, it's difficult to change a DAO, or the smart contracts underpinning it once it's deployed to the ethereum blockchain. This is "good," because one person or entity can't change the rules.
But it's also potentially a huge disadvantage. If someone spots a bug in a running DAO, developers can't necessarily change the code.
That was the problem with The DAO. Observers watched the attacker slowly drain of funds, but they couldn't do anything to stop it. (Technically, the hacker was following the rules as they were deployed).
Ethereum's lead coders reversed the transaction history to return funds to their owners, which was a controversial decision leading to a rift in the community.
The best way to handle a similar future situation is still up to debate.
Authored by Alyssa Hertig; images by Maria Kuznetsov; Coindesk
NEXT: HOW DO ETHEREUM SMART CONTRACTS WORK?
INDEX: A BEGINNERS GUIDE TO BITCOIN AND BLOCKCHAIN TECHNOLOGY
What is Bitcoin?
It’s a decentralized digital currency
Why Use Bitcoin?
It’s fast, cheap to use, and secure
How Can I Buy Bitcoin?
From an exchange or an individual
How to Buy Bitcoin in the UK
Buying bitcoin in the UK
How to Store Your Bitcoin
Use a digital or paper wallet
What Can You Buy with Bitcoin?
Spend your bitcoins
How to Sell Bitcoin
A guide on how to sell your bitcoins
How to Accept Bitcoin Payments for Your Store
Learn about bitcoin POS systems
How do Bitcoin Transactions Work?
Bitcoin addresses and private keys
Is Bitcoin Legal?
The current regulation around bitcoin
Who is Satoshi Nakamoto?
The founder of bitcoin
How Bitcoin Mining Works
By confirming transactions
How to Set Up a Bitcoin Miner
Generate bitcoins yourself
What are Bitcoin Mining Pools?
What are pools how and how to join them?
How Does Cloud Mining Bitcoin Work?
Alternative bitcoin mining solutions
How to Calculate Mining Profitability
Can you make a ROI?
How to Make a Paper Bitcoin Wallet
Creating an unhackable bitcoin wallet
Can Bitcoin Scale?
A look at the debate and the tech
What is SegWit?
A new way of storing transaction data
What is the Lightning Network?
Off-chain transaction channels
What is Bitcoin Cash?
Same blockchain, different characteristics.
Hard Fork vs Soft Fork
Why and how do blockchains split?
What is the Difference Between Litecoin and Bitcoin?
It’s the silver to bitcoin’s gold
How to Buy Litecoin
How to buy the bitcoin alternative litecoin
How to Mine Litecoin and other Altcoins
How to generate your own altcoins
Understanding Bitcoin Price Charts
A primer on bitcoin price charts
Bitcoin E-Commerce Services for Merchants
How to accept bitcoin at your business
What is Blockchain Technology?
A system of distributed data and logic
How Does Blockchain Technology Work?
Cryptographic keys, distributed networks and network servicing protocols
What Can a Blockchain Do?
Identity, recordkeeping, smart contracts and more
What is a Distributed Ledger?
A dynamic, independently maintained database
What is the Difference Between Public and Permissioned Blockchains?
Can anyone read or write to the ledger?
What is the Difference Between a Blockchain and a Database?
It begins with architectural and administrative decisions
What Are the Applications and Use Cases of Blockchains?
Tokenization, auditing, governance, settlement and more
How Could Blockchain Technology Change Finance?
Cross-border payments, new asset classes, regulatory compliance and more
What are Blockchain’s Issues and Limitations?
Complexity, size, costs, speed, security, politics and more
Why Use a Blockchain?
To manage and secure digital relationships as part of a system of record
What is Ethereum?
A blockchain application platform and ‘world computer’
What is Ether?
The ‘fuel’ of the ethereum network
How to Use Ethereum
Wallets, trading and ‘dapps’
Who Created Ethereum?
Vitalik Buterin
How Ethereum Mining Works
‘Proof of Work’ and ‘Proof of Stake’
How to Mine Ethereum
GPUs, mining software and pools
How Ethereum Works
‘Turing-complete’ programming, ‘state’ and the ‘EVM’
What is a Decentralized Application?
A distributed ‘smart contract’ system
What is a DAO?A ‘decentralized autonomous organization’
How Do Ethereum Smart Contracts Work?Code, transaction fees and ‘gas’
How Will Ethereum Scale?‘Sharding’ and ‘off-chain’ transactions
What is an ICO?Initial Coin Offerings refer to the distribution of digital tokens
Read the full article
Satoshi Nakamoto
Keine Verbindung
Verbindung wird wiederhergestellt
Etwas ist schiefgelaufen
Wir sind gleich wieder da