What Is The DAO And How Do You Use It?

Posted: May 18 2016, 8:18pm CDT | by , in News | Technology News


What is The DAO and How Do You Use It?
Credit: The DAO

The new corporation makes Bitcoin look like child's play.

There is a new economic corporation that has come into the public spotlight recently, and it might change everything.

The Dao is the second largest crowdfund in history, and that's not the only reason it is getting a lot of publicity. It isn't crowdfunding as one would think of it, however. Instead, it is a corporation that has bylaws written entirely in code.

The DAO is somewhat confusing as to how it operates, but it is a decentralized autonomous organization that, as of right now, controls more than $100 million in assets. However, it exists entirely on the Ethereum blockchain.

In exchange for supporting The DAO with "Ether," backers get DAO tokens which they can then use to vote on the direction of the organization. The can use the tokens to vote on big issues (kind of like shareholders) but they can also use it for more minute details.

In essence, they have complete control over The DAO.

People can submit project ideas they have to The DAO via a written plan accompanied by a smart contract code. The code will automatically execute payments so long as the agreed-upon conditions are met. This can all be done autonomously thanks to Ethereum.

For example, one popular proposal came from the company Slock.it to build a "universal sharing network" for The DAO.

The network would be a backbone for the decentralized sharing economy.

Under the proposed agreement, Stock.it would build the infrastructure, but The DAO would own the end product. They could then charge a percentage fee for every transaction over the network, returning the profits to DAO token-holders.

In some ways, it is a combination of a traditional business, a VC fund, and a Kickstarter campaign.

It also takes the privilege of starting a company away from the elite few and puts it into the hands of more people.

It is a shift that offers complete transparency, flexibility, and autonomous governance. It also holds extreme promise.

There is still a lot that needs to happen before just anyone can participate, however. To become a token holder, you need to have a deep understanding of cryptocurrencies. There is also very little protection at the current moment, though they are working to expand it.

Still, there is hope that this will last for the next few decades and could completely change the world. 

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The Author

<a href="/latest_stories/all/all/46" rel="author">Noel Diem</a>
Noel passion is to write about geek culture.




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