Most people who are familiar with the cryptocurrency sector come across news of the latest efforts toward making a decentralized autonomous organization (DAO). The simplest way to describe a DAO is that it can function without a management hierarchy.
That’s possible due to rules encoded into a smart contract that dictate how the DAO must operate. Also, the decentralized nature of a DAO prevents the concentration of power. Generally, a DAO has tokens it sells to interested parties. One token equals one vote.
Here are some possibilities that may define the future of DAOs.
When space exploration became a reality decades ago, national governments played a substantial role in making it happen. Today’s federal space programs don’t have enough funding, and their structures often prevent talented people who lack prominence from breaking through the barriers that stop them from contributing to those efforts.
Space Decentral is a DAO that wants to turn space exploration into a global effort instead of one defined by the countries with the resources to sustain it. Then, the information scientists know about outer space could increase at a rate that’s much faster than what’s happening currently.
Blockchain security is of increasing interest to people in the cryptocurrency space, mostly because hackers proved it’s not impenetrable, though it’s more difficult to infiltrate than many other solutions. Another recent issue is that some companies moved aggressively to patent blockchain technology. The criticism associated with that is the potential that it could stifle progress.
The Inventor DAO wants to build an intellectual property pool that gives its collaborating inventors more options to work together to make the blockchain more secure. It also wants to increase the number of apps that work on the blockchain.
People taking part in this DAO have opportunities to vote for the most significant contributions to blockchain technology and ensure the creators get rewarded accordingly. As mentioned earlier, smart contracts govern DAOs by making the framework in which they operate. However, consensus allows the members of a DAO to adopt changes.
The ever-evolving nature of the blockchain makes the structure of the Inventor DAO exceptionally sensible due to ongoing changes. It represents a new era in technology, and that could mean the traditional patent cycle-driven nature of inventions is no longer sustainable.
One reality that often causes a downturn in even the most well-functioning social clubs is that people who lack seniority or other kinds of perceived authority within the group feel shut out of the decision-making process. However, DAOs don’t only apply to business organizations and similar types of formal structures.
One recently formed DAO is a club for cryptocurrency enthusiasts and those interested in business developments called NEWconomy. After people register for it, they receive a cryptocurrency wallet with the club’s currency in it. They can then use those tokens to take part in polls or other decision-making activities. Each person initially gets 100 tokens, but they can earn more by being active members.
The club has twice-weekly meetings that let members hear market analyses or get the scoop from crypto industry experts. Since the meetings happen online, people can log in and take part from anywhere without being restricted by geography.
Depending on the success of this effort, more like-minded people may experiment with using DAOs to gather and allowing members to have their say.
In 2016, a hacker successfully orchestrated a $50 million hack on a DAO. The point of a DAO is that it operates without human intervention. As this event shows, though, humans can still insert themselves into the ways a DAO operates if they know the right way to go about it. Something essential you should bear in mind is that people set up smart contracts, and they can make mistakes.
People who responded to news about the hack mentioned that the vulnerability likely happened due to a coding mistake in the smart contract. The DAOs of the future must emphasize security even more than the ones that already exist. That’s because severe security flaws could cause them to lose momentum if people deem them untrustworthy.
These examples of DAO applications illustrate how there are virtually no limits to the potential technology. However, since DAOs don’t require executive interventions to operate, the people who set them up must be especially careful to make them free from errors. Once a DAO starts working, no single person — even an authorized developer — can make changes to fix it.
If more DAOs are created with security in mind, we could see they forever change how people invest in corporations, vote on possibilities and make societal progress.
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