Francis Galton asking a crowd to guess the weight of a bull in the 1800s is an often-cited example of the wisdom of the crowd. But that crowd had experience handling cattle. If there is a problem in the world today, you can bet someone is trying to solve it with blockchain technology. However, it’s unclear how many of these projects will still be around in a few years.
The concept of decentralized autonomous organizations has been discussed in the bitcoin community for years. In short, a DAO is an organization (for profit or not) whose mission statement is implemented by computer code, specifically self-executing smart contracts . It would not be a stretch to say that bitcoin was the first DAO.
Recently, a new DAO, called " The DAO ," raised more than $150 million worth of ether (the cryptocurrency of the Ethereum network) in a crowd sale. More than 14% of all the ether in circulation is now tied up in The DAO, which was programmed by coders at a German company called Slock.it.
The idea behind The DAO is to act as a sort of decentralized investment fund. Supporters of the concept say the wisdom of the crowd will lead to sound investment decisions that provide dividends (or other benefits) for the organization (and thus its users). The DAO also has the goal of supporting "the decentralized ecosystem as a whole.”
"I think the DAO’s large crowdsale just ensures we’ve a large enough financial incentive to get these sort of autonomous projects going and lay the groundwork for perfecting the DAO model over time," said Steven McKie , an Ethereum developer who is not involved in Slock.it.
To critics, the DAO appears to be yet another example of decentralization for its own sake. While bitcoin’s leaderless structure has made permissionless, censorship-resistant […]
