Decentralized autonomous organization (dao) definition

Nathan Reiff has been writing expert articles & news about financial topics such as investing và trading, cryptocurrency, ETFs, & alternative investments on toasanguocmo.vn since năm 2016.

You watching: Decentralized autonomous organization (dao) definition


What Is a Decentralized Autonomous Organization (DAO)?

One of the major features of digital currencies is that they are decentralized. This means they are not controlled by a single institution lượt thích a government or central ngân hàng, but instead are divided aao ước a variety of computers, networks, and nodes. In many cases, virtual currencies make use of this decentralized status lớn attain levels of privacy & security that are typically unavailable to standard currencies & their transactions.


Inspired by the decentralization of cryptocurrencies, a group of developers came up with the idea for a decentralized autonomous organization, or DAO, in năm nhâm thìn.


The DAO was an organization created by developers to lớn automate decisions và facilitate cryptocurrency transactions.In Junenăm 2016, due lớn programming errors & attachồng vectors, hackers attacked the DAO, accessing 3.6 million ETH.Digital exchange currencies de-listed the DAO token in September 2016.

What Is the DAO?

The DAO was an organization that was designed khổng lồ be automated & decentralized. It acted as a size of venture capital fund, based on open-source code và without a typical management structure or board of directors. To be fully decentralized, the DAO was unaffiliated with any particular nation-state, though it made use of the ethereum network.(See also: "How Do You Invest in the DAO?")


Why make an organization lượt thích the DAO? The developers of the DAO believed they could eliminate human error or manipulation of investor funds by placing decision-making power inlớn the hands of an automated system và a crowdsourced process. Fueled by ether, the DAO was designed to allow investors to skết thúc money from anywhere in the world anonymously. The DAO would then provide those owners tokens, allowing them voting rights on possible projects.


The DAO launched in late April 2016 thanks to a month-long crowdsale of tokens that raised more than $150 million in funds. At the time, the launch was the largest crowdfunding fundraising chiến dịch of all time.


Criticisms of the DAO

By May2016, the DAO held a massive percentage of all ether tokens thathad been issued up to that point (up to lớn 14%, according khổng lồ reporting byThe Economist).At roughly the same time, however, a paper was published which addressed several potential security vulnerabilities, cautioning investors from voting on future investment projects until those issues had been resolved.

See more: Tổng Hợp Những Câu Đố Hóc Búa Co Loi Giai, 1001 Câu Đố Vui Dân Gian Hay Và Hại Não Nhất


Later, in Junenăm 2016, hackers attacked the DAO based on these vulnerabilities. The hackers gained access khổng lồ 3.6 million ETH, worth about $50 million at the time. This prompted a massive & contentious argument aao ước DAO investors, with some individuals suggesting various ways of addressing the hack and others calling for the DAO to be permanently disbanded. This incident also figured prominently in the hard forking of ethereum that took place shortly thereafter.


*

According toIEEE Spectrum, the DAO was vulnerable to programming errors và attachồng vectors. The fact that the organization was charting new territory in terms of regulation & corporate law likely did not make the process any easier. The ramifications of the structure of the organization were potentially numerous: investors were concerned that they would be held liable for actions taken by the DAO as a broader organization.


The DAO operated in murky territory about whether or not it was selling securities, as well. Further, there were longstanding issues regarding the way that the DAO would function in the real world. Investors và contractors alượt thích needed khổng lồ convert ETH inkhổng lồ fiat currencies, and this could have sầu impacted the value of ether.


Following the contentious argument over the DAO"s future and the massive hacking incident of earlier in the summer, in September 2016, several prominent digital currency exchanges de-listed the DAO token, marking the effective end for the DAO as it was initially envisioned.


In July 2017, the Securities & Exchange Commission (SEC) issued a report, which determined that the DAO sold securities in the form of tokens on the ethereum blockchain, violating portions of US securities law.


Future of the DAO

What does the future hold for the DAO? The DAO as originally envisioned had not returned as of mid-20đôi mươi. Nonetheless, interest in decentralized autonomous organizations as a broader group continues lớn grow.


While there are many lingering concerns & potential issues regarding legality, security, & structure, some analysts & investors believe that this type of organization will eventually come khổng lồ prominence, perhaps even replacing traditionally-structured businesses.


Dash

The popular digital currency Dash is an example of a decentralized autonomous organization because of the wayit is governed and the way its budgeting system is structured. It may only be a matter of time before additional DAOs enter the field.


Investing in cryptocurrencies and other Initial Coin Offerings ("ICOs") is highly risky and speculative sầu, và this article is not a recommendation by toasanguocmo.vn or the writer lớn invest in cryptocurrencies or other ICOs. Since each individual"s situation is chất lượng, a qualified professional should always be consulted before making any financial decisions. toasanguocmo.vn makes no representations or warranties as khổng lồ the accuracy or timeliness of the information contained herein. As of the date that this article was written, the author owns cryptocurrencies.

See more: List 8 Phim Hanh Dong Ấn Độ Nổi Tiếng, List 8 Phim Hành Động Ấn Độ


toasanguocmo.vn requires writers to lớn use primary sources to support their work. These include white papers, government data, original reporting, và interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy.
*

*

*

*