What Is A DAO?

in News/Use Crypto by

What Is A DAO?

DAO – a decentralized autonomous organization is a type of future organizations for ideal workers who are fed up with unproductive meetings, trips to work only to see someone in person, or the execution of boss orders, whose expertise is not particularly believed. We are now in the early stages of launching these futuristic companies. And the first attempts come up against certain problems, which is quite expected. But the most important thing in the DAO concept is precisely its decentralized essence. There is no boss or executive director at DAO, a blockchain-based organization. And there is a customizable set of working relationships that are constantly self-organizing to achieve certain results and implement certain projects.

In the future, it will be easier to get coins than now. Today, the most common way is to buy bitcoins for dollars, euros, yen and other currencies, and then to buy bitcoins for tokens or coins of the DAO whose member you want to become. Also, to enter the DAO, now you can buy another cryptocurrency, the ether (based on the blockchain Ethereum). For many, the Coinbase cryptocurrency platform is the initial gateway for the transition from the fiat world to the cryptocurrency one. Next, users go to such exchanges as EXMO, Bitfinex or Kraken.

What is the difference of DAO?

The DAO is a brand new type of organization that is best described by comparison with a digital company that is not tied to any legal entity. It should be noted absolute impartiality in the selection of participants. Using the implementation of smart contracts from Ethereum, The DAO allows anyone from all over the world to participate in the management of the general fund of funds.

Principles of work in the DAO

And there is another potentially huge advantage to this structure. Because DAO is organized around smart contracts and values, not people and roles, flexibility and agility for innovation increase significantly. To begin with, any owner of a DAO token can make an offer, where he will indicate the amount of ETH that will be required to develop a product or service. The proposal also defines the level of control over the powers with which The DAO should vest potential contractors.

After making a proposal, the owners of DAO-tokens participate in the voting. Each of them has absolute power over their own funds invested in the project. They can also vote for changing the service provider or changing any other offer parameter. Moreover, even if the owner of DAO tokens subsequently decides to leave the project, he or she will still have the right to make a profit from the sale of a product or service.

The logo of Bitcoin (virtual currency) is pictured on a door in an illustration picture taken at La Maison du Bitcoin in Paris July 11, 2014. REUTERS/Benoit Tessier

Criticism

Another point is related to the platform on which The DAO operates. The “wise crowd” of people supporting The DAO may be so absorbed in the hype around ETH that, in choosing projects for support, it will start to give preference to Ethereum and related ideas, the usefulness of which, according to experts, has not yet been proven.

I’m a freelance writer and full-time curious person. My main interests are philosophy, politics, art, culture, science, and how they’re all interlinked. When I’m not writing, I’m fronting a band, producing records, and making videos. I’m also currently working on launching a YouTube channel that will focus on culture and politics. I think blockchain technology is fascinating because of the huge potential it has to revolutionise not only the financial sector, but society as a whole.