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The DAO Becomes The Largest Crowdfund To Date

Source: bitcoin

DAO

The programmable token Ethereum and its blockchain have been breaking the mould ever since its pre-sale was announced back in July of 2014. It launched with its initial sale in September of the same year and raised over $18.3 million USD becoming the sixth largest crowdfund to date. Following the exponential growth of Ethereum, developers who help maintain the community and Ether protocol have created a decentralized autonomous organization called the DAO.  The platform is built to support fund Ether projects and has recently skyrocketed past the Ethereum pre-sale becoming the biggest crowdfund ever raising a whopping $119 million so far.

Also read: Bitcoin Price Stagnates, What Happens Next?

The World is Changing. The Ethereum DAO Hub What is it?

The decentralized autonomous organization known as the DAO is no more than code that runs a structured governance platform. The beginning of this concept is truly mesmerizing to many as it’s one of the first times this type of infrastructure has been built using the Ethereum blockchain. A DAO is not run like your typical company or large corporation and allows the initial steps of decentralized transparency to take hold with this type of organization. The framework behind the DAO was implemented by the Slock.it the team is well known for working with IoT solutions using Ethereum.

For seventeen days now the DAO sale has been growing big and is making headlines all across both crypto-based media outlets and with mainstream news as well. When it approached the landmark $100 million point, the project became one of the most powerful organizational frameworks based on only code. The hub of the DAO is a series of smart contracts constructed on the Ethereum blockchain and anyone who has invested in its native token has voting power within this newly created system. In the corporate world rules are governed by executives, investors and outside entities which are often found to be quite fallible. Without explicit agreements, these operations can falter to the wayside and manipulate the interests of common investors. However with the spawning of the Ethereum-based decentralized autonomous organization its activity, rules, and voting is determined by the contracts written with the Solidity programming language.

Ether the digital fuel that powers the Ethereum network is also used by the DAO for its functions and operations. When someone wants to start a project and fund it through the DAO, it initiates a “Creation Phase” in which all rules are executed by code. The protocol stores the Ether and native DAO tokens within its framework but “requires a ‘Contractor’ to build a product, write code or develop hardware.” All DAO token holders can become a Contractor and submit a new project but it must be approved for it to initiate a smart contract proposal. The projects white paper states:

“Such smart contracts can be parameterized and enable a DAO to interact with and influence the project it chose to support.” — DAO Hub’s White Paper

What Will Decentralized Autonomous Organizations Do For Society?

The implications of the DAO is pretty huge as it’s a very new concept that undermines the need for third party entities. Many facets of society could use this model and it could reinvent the very mechanisms of infrastructure we rely on. Concepts such as newly formed voluntary governance structures based on actual consent and voting of the participants. A DAO like architecture could remove the current oligarchic system run by a small minority of fallible humans and reform it into a framework based on code and self-executed smart contracts. For the most part, contracts make the world operate but are riddled with costly and needless third-party arbitration such as lawyers, accountants, and board members. The father of smart contracts Nick Szabo once said, “I argue that the formalizations of our relationships — especially contracts — provide the blueprint for ideal security.”

Alongside the change of governance corporate entities could also rebrand into a decentralized autonomous organization as well. It would cut costly overhead that comes with hiring attorneys, massive amounts of paperwork, and logistics that can take weeks to settle. The existing system is quite cumbersome and has been for years; with the introduction of a DAO protocol/community society’s idea of hierarchical roles of importance vanish. Blockchain and digital currency enthusiasts are starting to believe the DAO architecture could replace these traditional corporate models. However, it remains to be seen whether or not it actually will work.

The crowdsale is doing very well but the model actually operating and doing what it’s supposed to is another story for the future. It is just the beginning stages of the popularity of the DAO concept taking hold. Other innovators within the digital currency and blockchain space have also been working similar concepts. Projects such as Swarm, BitNation, and Expanse are others who have dabbled with the idea. Some have discussed the idea to great length and some have initiated their own formations of a DAO as well. There are those that feel the project has room for improvements concerning the current and popular Ethereum DAO. Bitcoinist spoke with BitNation’s Susanne Tarkowski Tempelhof and she gave her opinion of the DAO introduced by the Slock.it team saying:

“I’m tremendously excited about the remarkable achievement of The DAO, it sets a successful precedent for all of us to operate in a post-centralisation world where only a few powerful entities, may it be banks, governments, or venture capitalist funds, could tell us how to live and operate. Although much writing and ideas been circulating about it for years, in my opinion, The DAO seems to be the first ones to have brilliantly popularised and implemented it (at least as far as the crowdsale and GUI goes), which is definitively a game changer in this space. When Slock.it first released their code on GitHub, and on various Google doc’s, I jumped on it, like a kid with a new bike, realising it could be a framework for Decentralized Borderless Virtual Nations (BDVNs) – but with some modifications, namely, the removal of democracy. Why remove democracy, one might ask? Isn’t democracy the beacon of all freedom? No, democracy is the rule of the majority, mob rule, stripping away people’s rights —— simply because they happened to be outnumbered. Alexandre Van de Sande, the fantastic MIST developer, and I sat down in January in Rio discussing the pros and cons of a democratic organisations, and how to deploy the Ethereum DAO code in the DBVN context. The rational conclusion to draw from it, is that different organisational types suits different personality types. And that’s the beauty of The DAO. They set a precedent, just like Bitcoin, that everyone can follow, or fork, and make their own. Just like we’re doing with our Virtual Nation, who we hope will operate in compatibility and computability, with The DAO, and the DAOs it will empower. The future is very bright, indeed.” — Susanne Tarkowski Tempelhof Founder & Chief Unicorn of BitNation 

The world is seeing a whole lot of new ideas and concepts such as decentralized autonomous organizations, permissionless cryptocurrencies, and architecture built with smart contracts are growing more popular every day. Society’s norms are changing with each new technological step towards a free market and a DAO is one of these steps. Surely there will be more but Ethereum’s current model is proving to raise eyebrows with its immense funding of capital. Now all that remains is putting the code to the test.

What do you think about decentralized autonomous organizations and the current Ethereum DAO version? Let us know in the comments below.


Images via the DAO Hub website

** Disclaimer the spot price of Ether also will determine if the project continues to hold the #1 crowdfund spot.

 

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The DAO Becomes The Largest Crowdfund To Date

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Led 23

Ethereum’s Market Cap Takes The Number Three Spot

Source: bitcoin

Ethereum’s Market Cap Takes The Number Three Spot

The turing complete token Ethereum has been making strides towards the top spot in cryptocurrency capitalizations. This week the digital currency has bumped Litecoin out of the third position on the coinmarketcap.com list hitting a cap of over $138 million USD.

Also read: Number of Ethereum Nodes Grows Exponentially

The past few months have been active for Ethereum, who has seen development, investment and positive media within its crypto-environment. The built-in turing-complete programming language as a layer configured into the ETH blockchain has intrigued developers and investors. This system is said to enable businesses and ordinary people the ability to construct autonomous organizations, smart contracts, and applications. The tokens currently have an available supply of 76,471,765 ETH and are worth $1.80 USD at press time seeing quite a bit of value increase.   

Recently the tech-giant Microsoft announced earlier last year that they would be using Ethereum with its cloud-based Blockchain-as-a-Service (BaaS) Azure platform. Microsoft included other distributed ledger services within its research and development including Ripple, EmercoinFactom and others. On January 20th R3 CEV the blockchain infrastructure project backed by 42 well-known banks announced its use of Ethereum and Microsoft Azure. IBtimes UK reports that R3 is connecting 11 legacy institutions together with these distributed ledger technologies. The banks included in this venture are Barclays, UBS, Credit Suisse, HSBC, Wells Fargo, Unicredit, Natixis, Commonwealth Bank of Australia, BMO Financial, TD Bank, and the Royal Bank of Scotland. CTO for the Investment Bank at Barclays, Brad Novak explains the protocol is well known saying:

“Ethereum is a well-known open source technology in this space and we also look forward to collaborative experiments using other technologies.”

Since these announcements made by Microsoft Azure and the latest statements made by R3 the Ethereum value has seen quite the gains. January 2016 has seen a lot of trading volume and about a 20% jump in price. However not everyone is on the Ethereum train and see competition coming in the future from camps like Rootstock, Tau Chain, Maidsafe, Counterparty, Bitshares, Coinprism and more. Despite this, the Ethereum community has seen significant development under its hood and many side projects using its protocol.

Devcon1 held last year had shown innovative concepts from teams like Slock.it. The founder of Slock.it Stephan Tual explained the Ethereum Computer with his Medium post showing off the IoT use cases with the ETH protocol. At Devcon1, the device is shown locking and unlocking a simple household doorknob at the event. The summer of 2015 heated up for Ethereum when it was an unknown source said that the project was planned on being experimented with by BNP Paribas, Barclays, and UBS.    

There have been a few in the cryptocurrency community who have said that Ethereum was trying to take Bitcoin’s lunch as it approaches the number three spot on the capitalization totem. However it’s got a long way to go to get near Bitcoin’s 5.8 billion market cap and network effect with thousands of merchants, devices, and software applications. After Mike Hearns announcement that the protocol had failed in his eyes while preparing to join the R3 team, coincidentally coins like Dash and Ethereum had seen a price spike. The price of Bitcoin dropped about 17% immediately after the developers public message. Also reports of an ETH enthusiast spamming people with direct messages via /r/bitcoin saying “Ethereum will defeat Bitcoin” recently spread around the crypto-community after Hearn decided to say farewell. I have also received this reddit message in my private inbox.

The Bitcoin price has jumped back up rebounding shortly after Hearn’s statements and Ethereum has seen quite the value increase moving up its position. Will it be a competitor of Bitcoin or complement the current king of digital currency? Only time will tell as it seems the turing-complete programming language system wants to continue to leave its mark on the landscape of virtual money, IoT and many financial processes.

What do you think about Ethereum’s rise? Let us know in the comments below. 


Images courtesy of Shutterstock, Pixbay, and Wiki Commons 

The post Ethereum’s Market Cap Takes The Number Three Spot appeared first on Bitcoinist.net.

Ethereum’s Market Cap Takes The Number Three Spot

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