Click to Open Overlay Gallery Getty Images The Decentralized Autonomous Organization is a venture capital firm, like Andreessen Horowitz or Kleiner Perkins. It chooses new ideas and businesses to invest in. But the DAO isn’t run by rich white Silicon Valley dudes. It’s run by a network of machines that operate according to the same basic principles that drive the bitcoin digital currency. If you put money into the DAO, these machines let you vote on which new ideas it should invest in. The more money you put in, the more votes you get.
By the time the deadline for investing in the DAO arrived late last month, about 10,000 people had anonymously poured more than $168 million into this new online creation. That makes it the largest crowdfunded project ever. Now, it’s time for the DAO to start accepting pitches for all those anonymous people to vote on, bringing a new kind of democracy to the iconic flavor of capitalism that delivers so much modern technology.
Just one problem: So far, all the pitches are suggestions for changing the DAO.
A few hours before the investing deadline, a group of computer scientists described what they believe are fundamental flaws in the DAO, both security holes and flaws that discourage participants from voting honestly. The group called for a moratorium on pitches, and now, the DAO is effectively on hold as the community decides whether these flaws exist and how to fix them.
For sure, even some of the DAO’s biggest critics say it’s a wonderful idea—a way of eliminating the kind of good ol’ boy network that often drives not only VC firms but so many other kinds of corporations. But like so many projects that have sprung from the ingenious, decentralized creation that is bitcoin, the DAO is still very much […]
