
The price of Ethereum is soaring because of the DAO experiment - prostoalex
http://qz.com/688194/the-price-of-ether-a-bitcoin-rival-is-soaring-because-of-a-radical-150-million-experiment/
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stcredzero
_Think of it as venture-capital firm Andreessen Horowitz, but with Marc
Andreessen and Ben Horowitz replaced by the wisdom of the crowd._

How wise is the crowd? They gave almost $2 million to Solar Freakin Roadways.
That's how wise.

EDIT: How about Twitch plays venture capital?

~~~
zkirill
It is concerning how defensive some supporters of the DAO get when the wisdom
of the crowd is questioned in this context. IMO vote by majority is the
biggest issue with _the_ DAO.

Has anyone come across a DAO where the voting power lies with the board of
directors?

~~~
bresc
That wouldn't be a _Decentralized_ _Autonomous_ Organization... short DAO...

~~~
stcredzero
It might be nice if votes could be weighted by some sort of basic competence
test.

~~~
voxic11
The basic competence test here is, do you have money and can you figure out
how to convert it to DOA tokens.

~~~
stcredzero
Kickstarter has shown that the former isn't a good filter. Perhaps the latter?

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heimatau
I'm fairly green thumb when it comes to bitcoin's interworkings, so please
inform me if something I say is terribly off.

I'm of the perspective that Ethereum is the next evolution of
Bitcoin/Blockchain/RPOW. In my readings, I'm of the belief that it's not about
currency/fiat (although that does play a big role). I think the techies, who
helped create Bitcoin, realized that Bitcoin's value is much greater than a
replacement currency for a nation (or the world for that matter).

Think of it today. Google, FB, hell Verizon, AT&T, Comcast, etc, they all have
TROVES of data about US as individuals. What if you could create a layer on
top of the internet that anonymizes your behavior and you could SELL your
data, only when you CHOOSE to release it? I think this is what the 'Bitcoin
experiment' has taught many of the developers and they are going to try to
flesh out their idea, which, IMHO, is to allow software to improve, in an open
data set, without infringing on our personal privacy.

I think this system could be breading ground for an AI birth. I'm not the only
one (@aantonop has said something recently[1]) and I know AI has been
speculated for a while but...this new model excites me. Mainly because
Skepticism is at the root, the blockchain is a trustless system. If AI were to
come about, shouldn't it think critically? Anywho, that's my current
fantasy/theory/perspective. As for the 'value of Ethereum' I see it in the
tech not a monetary value.

[1]
[https://www.youtube.com/watch?v=_0jxX84mzts](https://www.youtube.com/watch?v=_0jxX84mzts)

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brianpgordon
> Token-holders can’t sell out now, because the DAO smart contract says tokens
> are locked up during this subscription period. But the lock-up period ends
> in seven days. That’s when we’ll see a drop in Ether’s stratospheric price
> rise. “As soon as people are able to transfer out of DAO tokens, the Ether
> price will drop temporarily,” says Joseph Lee, who runs London-based bitcoin
> trading platform Magnr. “People would want to cash out. The price has been
> rising rapidly.”

If you're thinking of shorting ETHUSD, I did some digging and found that the
creation period ends at 2AM pacific on May 28. You can verify this by looking
at the fourth constructor argument for the contract, which is the so-called
"closingTime" in the contract:

[https://etherscan.io/address/0xbb9bc244d798123fde783fcc1c72d...](https://etherscan.io/address/0xbb9bc244d798123fde783fcc1c72d3bb8c189413#code)

The fourth constructor argument is 0x57495e10, which is the UNIX epoch time
corresponding to 2AM pacific on 5/28.

~~~
reddytowns
I don't understand how people can cash out if the ETH are stilled locked in
the DAO's tokens. They can sell the tokens, but no one is receiving any ETH.

Once they start spending money on proposals, I could imagine more ETH getting
into the market, but this would happen slowly, since proposals pay out over
time.

There is some talk that a single shareholder could, theoretically split his
portion of the unspent pool of ETH into a new DAO, which he has full control
over and could then sell, but such a process would be complex (he'd have to
split it, then form a proposal and vote on that proposal to send the money to
an address he controls, all through a command line interface, interfacing with
the Dao contract directly. Not impossible, but over most people's heads).

Instead, I'd think they'd rather than just sell their DAO tokens on the open
market for ETH, BTC, or whatever else. If they sell it for ETH, they'd be
effectively putting even more buy pressure on ETH, which may increase the ETH
price even further.

Here is more information on how The Dao can be split in order to get ETH funds
out:

[https://forum.daohub.org/t/how-do-we-get-our-eth-back-
from-d...](https://forum.daohub.org/t/how-do-we-get-our-eth-back-from-dao-
tokens/749/8)

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drcode
This article is a bit misleading- The all time high happened a couple months
ago, long before the DAO.

~~~
djloche
The past few days has seen a spike up to prices near the all time high. The
media focus on the DAO and ETH in general has no doubt brought in new
speculators and investors.

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dfischer
I'm still confused on what Ethereum really is and how likely it will succeed.

~~~
natrius
Ethereum is a platform for decentralized applications. I think of it as a
giant scroll in the sky that everyone can write to, but each line has to be
cryptographically signed to identify its writer, and existing lines in the
scroll can't be modified.

A giant digital scroll in the sky is meaningless, but Ethereum lets you write
actual programs as entries in the scroll that define what new entries actually
mean. The DAO defines entries that mean "I'm funding the DAO", "I'm voting for
a DAO proposal", and "I'm withdrawing my remaining funds from the DAO". Since
these entries can't be modified, any app can evaluate the scroll and display
conclusions about what has happened in history.

Since Ethereum is Turing-complete, any interaction between people can be
defined as entries in the scroll. Ethereum is the raw material for social
coordination. Instead of dreaming of ways the world should work, you can build
new ways and see if people want to use them. It's incredibly exciting, and I
hope more people join us in building social software that users control.

~~~
dfischer
That sounds compelling, what are the obstacles for it to truly make a
difference?

How much adoption would it require? It seems incredibly ambitious which is
great but what can _we do_ to make it more likely to succeed? What does the
next 3-5 years look like?

Is it meant to be a new form of government at a state level? Or more oriented
to small scale like a company?

~~~
natrius
I hope the product I'm building will have a big impact within a year, but I'm
biased. Adoption is easy because Ethereum-based apps can be plain old
websites. The hard part is building something compelling.

I don't think it's really about replacing governments or companies. I view
this technology as a way to empower individuals. Think of how marketplaces
like eBay, Uber and Airbnb have empowered individuals to trade without an
employer. Imagine those without the monopolist middlemen taking a cut and
kicking people they don't like out of the market. Imagine open, efficient
marketplaces for every kind of trade that free more and more people from the
soft feudalism of corporate employment. Imagine new kinds of incentive systems
to get more good outcomes and fewer bad ones.

Our economy is our collective nervous system, and we can now program the whole
thing without permission. If you want to see this technology to succeed, you
can help build products that use it or be an early adopter whose feedback
helps guide products in the right direction. We'd love to have you in
r/Ethereum.

------
rasengan
The price of Ethereum is soaring because of Ethereum.

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jgalt212
DAO is a horrible idea. Average VC returns over the long run, have been very
underwhelming. The only way to win in VC land is to pick* the best VCs.

*some may argue it's just as challenging to pick winning investment managers as it is to picking winning investments. My personal opinion is it's pretty easy to avoid those totally inept, but even after to doing so, is your basket of returns any better (higher and less volatile) than an SP500 index fund?

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papaf
I am renting a virtual stake in an Ethereum miner with Genesis mining and I am
not seeing anything like a spike in my return. In fact it is about half what
it was a few months ago.

Edit: this is not an advert, there has been plenty of speculation that Genesis
is skimming from the returns and I was just providing a datapoint.

~~~
TylerE
You do know that every cloud miner EVER has been either a ponzi scheme from
the start or turned into one?

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Paul_S
Blink and you'll miss the peak.

I'm backing ethereum because wall street is backing them so I expect them to
hype it in the mainstream press enough to provide a steady intake of new
users.

I also (not so) secretly believe in the project itself.

------
nikolay
A new bubble to burst... All the hype around Ethereum reminds me of Bitcoin.
Learn from the past! Sell when the hype peaks! Don't get too greedy!

~~~
ChrisClark
All those poor people who sold Bitcoin at the peak hype of $3. :( Or $20, or
$250.

~~~
Artemis2
Or who didn't sell at $1200!

~~~
dnautics
I sold at 900 and bought back at 300! Bubbles are fun (for now)

~~~
gnaritas
Great trading, what'd you base those decisions on?

~~~
dnautics
I don't know!!! _Feeling_. I also wanted to buy etherium last Thursday with
the intent of cashing out in advance of paying for car repairs (I'm picking it
up today)... that was on the news of the dao and arcade city in Austin. (I
messed up setting up trading accounts and the money tx was too slow)

I did sell out btc at 440 and bought back in at 390-ish when that story hit
hacker news about the button tx saturation "issue"

Two things I go by:. 1) the market is not efficient. 2) herd behavior can be
your friend.

~~~
gnaritas
> I don't know!!! Feeling

Luck then, oh well, congrats anyway.

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jackcosgrove
I am all for cryptocurrencies as a means to privacy. But when their proponents
claim that cryptocurrencies will replace fiat currency with something fairer
and more tied to value, all I can think of is the speculation, cheating, hype,
and chicanery that has gone on with Bitcoin and now appears to be going on
with Ethereum. The new currencies seem to be less fair and more _ethereal_
than dollars and euros.

~~~
imaginenore
The same sh*t goes on in the regular currency trading as well. The only reall
difference, they have a lot more liquidity, so all the pumps and dumps are a
lot less pronounced. But also a lot more money is involved, so people make
huge profits still.

~~~
rando18423
So what you mean to say is that that activity makes up a much smaller part of
those markets?

