In May, Bitcoin Magazine covered the spectacular launch of The DAO, a new kind of organization created and run using blockchain software rather than conventional corporate structures. The DAO ‒ an acronym for Distributed Autonomous Organization ‒ is similar to an open venture capital fund based on Ethereum smart contracts and rapidly became the world’s largest crowdfunding to date.
Shortly after its launch, The DAO had an equally spectacular crash caused by poorly understood aspects of its implementation of smart contracts, which a malicious attacker was able to exploit.
Emin Gun Sirer of Cornell University told The Economist , “the attacker simply read the terms and conditions more closely than anyone else.”
Regardless of misfortunes and temporary setbacks that are only to be expected in the early phases of a new technology with a potentially disruptive impact, DAOs have a huge potential. According to futurist David Orban , The DAO can be a pathfinder and a model for very ambitious crowdfunded initiatives to tackle important challenges, including a new global phase of the space program.
“From the $10 million order of magnitude crowdsales two years ago, to the $100 million crowdsale today, we will get to $1 billion in a couple of years, and then to $10 billion in another two-three,” he said.
Now, other renowned cryptographers, technologists and economists specialized in future studies are starting to weigh in. Futurist Ralph Merkle , who is also one of the inventors of public key cryptography, the inventor of cryptographic hashing and the originator of the “Merkle Trees” used in blockchain systems including Bitcoin and Ethereum, has published a paper titled “ DAOs, Democracy and Governance .” Merkle’s thesis is that DAOs and crowdsourcing could lead to a new form of democracy which is more stable, less prone to erratic behavior, better able to meet the […]
